8 Rookie Mistakes Made by Founders and Startups That Can No Longer Be Corrected
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| Image by Laura M from Pixabay |
Sage One, the manufacturer of commercial software, called for the blog parade in the medium-sized business blog. The topic: The most common beginner mistakes among founders and startups and they have already written about The biggest mistakes in accounting.
Beginner Mistakes Made by Founders and Startups That Can No Longer Be Corrected
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| 8 Rookie Mistakes Made by Founders and Startups That Can No Longer Be Corrected |
And we responded to this call.
Because there are quite a few typical mistakes that founders and startups make right at the beginning of their self-employment, but which can be avoided. Much more interesting, we thought, are those errors that can no longer be ironed out, or at least with difficulty or with a certain financial outlay.
That is why we have created an overview of exactly these errors and appeal to you:
Remember and do better.
8 Typical Beginner Mistakes for Founders and Startups
1. Waiting Too Long
What takes a long time turns out well? Not necessarily. Many beginners have the problem that they wait too long, ponder and plan until they finally decide on the decisive step.
Of course, there is an idea, but you don't feel 100% comfortable with it. The idea should rather mature a little longer. That sounds like a wise consideration. To think through the idea first and not to start hastily.
But if you wait until everything has been considered, thought out, and polished down to the smallest detail, you not only lose a lot of time. You might run out of money and someone else snatches the valuable idea right under your nose.
2. Failure to Apply for Subsidies and Grants in Good Time
If you are looking for work, receive unemployment benefits I and are interested in starting a business, you can receive a start-up grant from the Federal Employment Agency. Provided that certain requirements are met.
For example, you can only successfully apply for the start-up grant if you are entitled to unemployment benefit for at least 150 days before applying for the grant. They say: if you come late, you will miss the best. In this case, the best thing is several thousand euros that slip through your fingers. That hurts.
3. The All-or-Nothing Mentality
The good thing is that striving for perfection contributes significantly to the fact that we do not constantly trample on the same spot, but rather develop ourselves further. If you are a perfectionist in a positive sense, you raise the bar a little higher every time. To a healthy degree.
But if you overdo it with the all-or-nothing mentality, you slow yourself down and your business, wasting time. Instead, it would be much easier to get the business rolling first, test it early on, and get user feedback.
To tinker with it in secret until it is perfect - that will be nothing. Because, as is well known, the practice always looks very different from the pure theory, which one has previously thought through painstakingly in a quiet little room down to the smallest detail. It makes more sense to go to the market with the 80% or 90% solution.
4. Don't Make Specific Agreements with Customers
When you win your first customers, the friends are usually so big that you just want to get started. You shouldn't forget to put everything down in writing.
This applies above all to the specific scope of services, as otherwise different views and unpaid additional work can result. General conditions such as the method of payment, dates, and remuneration of additional requests should also be clarified in advance.
Unfortunately, there are always customers who take advantage of such ambiguities, especially with founders.
5. Too Little Money Saved
Pay, pay, pay. If you are self-employed, you have to know your numbers. But many founders and startups fail because of their finances. In doing so, they need a lot of patience, especially at the beginning.
With realistic financial planning for the first few months, however, this pathetic end can be prevented. If you include all factors in the planning. Administrative costs, product-specific costs, marketing costs, office costs, office equipment, etc.
Perhaps there were also acquisition costs that were not necessary or overpriced? Calculated too tightly? Absolute honesty and precision are required here.
Those who lie to themselves will regret it later. At the latest when you run out of breath halfway through. Borrowing from banks or venture capital is not the solution to the problem. The rule here is: it is better to grow slowly and organically, ie from your resources, than to sink into a mountain of debt. Because a start-up is known to be a marathon and not a 100-meter sprint.
6. No Sensible Market Analysis
Fall in love not only with your idea but also with the user's problem. Sure: you have to find an idea that you are passionate about. But that's not enough. There must also be customers or users who are passionate about this idea. No matter how sophisticated your technical development is. If it doesn't meet the needs of your potential customers, i.e. solves a specific problem, your business will fall by the wayside.
And to find out whether there are any of these categories, a market analysis is essential. You should also check out your competitors right away. Those who don't know their market is thrown out. That is the only truth. Otherwise, you might be surprised by a smarter competitor.
You can easily have your idea and business concept checked by a specialist before setting up a business to eliminate errors in good time. There are also management consultants, business start-up consultants, and public institutions, e.g. B. chambers or professional associations in question. If you have to reject the business idea based on the market analysis, you should accept this and continue to look for a suitable business idea. As difficult as it is.
7. Disregarding Legal Aspects
In § 26 of the State Travel Expenses Act of North Rhine-Westphalia it says: "If an official dies during a business trip, the business trip is over." This and other bizarre laws and guidelines show Germany, one country of bureaucrats.
This is also the case with start-ups. Business registration, permits, an entry in the commercial register, choice of legal form, information on the business letter, general terms and conditions - if you do not adequately clarify formal and legal questions when setting up a company, it can quickly become expensive. Chambers of crafts, IHKs, guilds, and associations provide valuable information. Provided you ask for it.
If you are unsure, do not feel sufficiently informed by the associations and chambers, and are simply overwhelmed by the flood of information on the Internet, then you should consult a consultant. Relevant questions about the upcoming start-up can be discussed with a qualified advisor. At the same time, founders and startups can concentrate more on their core competencies.
8. Don't Worry About Tax
Accounting? Purchase calculations? Sales calculations? What are you doing in your head Better not?
Commercial duties are often neglected by founders and startups due to a lack of time. Bad mistake. Because that's right at the latest when the tax return has to be drawn up.
Either you have to rummage through a mountain of files all by yourself to find the correct statements that you haven't filed properly for months, or you hire a tax advisor.
But even this will keep you in check with daily calls because he cannot find the crucial document again. It's just stupid that you are currently working on a very important and time-consuming thing that requires full concentration. Controlling is the prerequisite for optimizing sales figures. The lack of know-how can also be acquired relatively easily. Corresponding courses are abundant. You might even become a good businessman then.
Conclusion
Anyone who informs themselves online about typical beginner mistakes made by founders and startups can fall back on an impressive fund of entrepreneurial experience. In this way, many errors can be avoided from the outset.
We have focused on those mistakes that are difficult to eradicate. Associated with a certain financial outlay. There are certainly other pitfalls so that this article does not cover all risks by far.
As a founder, you always have to be on your guard. Nevertheless: Nobody has to be a founder, boss, and entrepreneur in one person. There are enough advice centers available and allow you to focus your attention on the elementary things that drive the business forward.
If you feel like it, you can take part in the blog parade until September 5th and share your personal experiences on the topic of the most common mistakes made by beginners and startups.
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