Enthusiasm combined with a lack of business experience and knowledge can be a lethal mix for a young entrepreneur who decides to start their own business. It can lead to an excellent result, with the entrepreneur learning from their mistakes along the way, but it can also end in costly mistakes, bad experiences of entrepreneurship and the frustration that so often follows.
Starting your own business at an early age can be an exciting challenge. And yes, we will learn from our mistakes, but if we look at the mistakes many young (and not so young) people have made, we can spare many others that frustration.
1. Hiring your best friends
It’s fine to hire people you trust blindly. But very often your best friends are not the best professional choice. What’s more, in many cases, when friendship and business are mixed, the friendship ends up being lost and, unfortunately, the business is damaged too.
In business we need to surround ourselves with professionals. If you can bet that your friend is one of the best professionals in the area you need to hire for, go ahead. If not, you should know that you’ll be getting into trouble, even with the friendship itself, especially when the business grows and you have to fire your own friend. And believe me, few friendships survive one friend having to fire the other.
I have seen companies with great growth potential where the owner’s friends held key positions, and those very friends were a cancer on the company, while none of the “subordinates” found the courage to go over their heads and speak plainly to the manager. In the end, those companies with great growth potential stayed small family businesses. So when you hire, look for someone who has a specific set of skills. Better a stranger who helps you grow the business than a friend who sinks it.
2. Looking for a partner for the wrong reasons
Starting a business can be frightening, and just as you wouldn’t walk into a haunted house on your own but would find the courage to do it with someone else, the same thing can happen in business. Many young entrepreneurs look for a partner not because they need one, but to share those fears. And, once again, they make the double mistake of choosing a good friend as their partner.
When it comes to choosing a partner for your business, remember that we should choose them as a complement: that person should be good at different skills from ours and have knowledge in areas we know nothing about.
3. Taking money too quickly
Most entrepreneurs think they need all the financial backing in the world to get started, when it has been more than proven that if you give an entrepreneur more than enough money, the failure rate goes up: the business won’t grow organically, the entrepreneur won’t need to develop their creativity, and they’ll make investments that aren’t necessary yet.
Sometimes young entrepreneurs are quick to accept a capital partner, who will put up the money but won’t want to be involved in running the business. In this case, the problem wouldn’t be your business failing, but succeeding without you having negotiated the terms with those capital partners or investors properly.
When you start a business, always assume that you could be very successful, because in a certain percentage of cases the business does work out, and then we regret the decisions we made when we didn’t think we were going to succeed.
4. Waiting for the perfect moment
If I have learned anything from waiting for the perfect moment for anything, it’s that the perfect moment never comes. So any moment is perfect.
The perfect moment to start shaping your business ideas is now. The sooner you start, the sooner you’ll reap the results of your work. As the saying goes: “in a few months or years, you’ll regret not having started now.”
5. Impatience
Young entrepreneurs are very impatient. And that sometimes leads them to look for shortcuts that break the natural process of a business’s growth.
Everything worthwhile usually takes time, because as a rule, easy come, easy go. And the same goes for building a business. You’ll have to learn to wait, work hard and persist, sometimes without seeing any significant results.
6. All talk and little action
Some young entrepreneurs need a push. You can listen to their endless talk about that business idea that is the best of all and will be hugely successful. On the one hand they’re waiting for the right moment; on the other, they don’t have the means to start; and sometimes they say it’s because they’re afraid someone will steal it.
As a rule, these entrepreneurs end up doing nothing, probably because nobody gives them that push. They just need to know that business ideas are worth nothing unless they are put into practice. You have to talk less and get to work on it.
7. Trying to please everyone
However good your business idea, product or service is, I’m sorry to tell you that not everyone is going to like it. The problem is that when young people start their business, the most diligent ones know they must listen to people’s criticism in order to improve their product. Many of them, faced with criticism, want to change things straight away. And that is the perfect way to drive yourself mad, even losing sight of the original business strategy.
In fact, your product or service shouldn’t appeal to everyone, because, as Tim Ferriss, author of The 4-Hour Workweek, put it, a product aimed at everyone has no business. Find a market to serve and focus on it. Remember: don’t create demand, satisfy the demand that already exists.
8. Lack of focus
Don’t try to do everything, or you’ll do nothing. Don’t try to be everywhere, or you’ll be nowhere. Even those of us who are “older” find it hard not to lose focus, which is why it’s one of the main problems a young entrepreneur faces.
You have to concentrate on what matters most in the business and try to delegate other, more basic tasks that take more time but don’t help the business much. The sooner a young entrepreneur starts planning a schedule around the few things they must do each day with their full attention, the better. The sooner they learn to say no to the hundreds of useless things that are just a waste of time, the sooner they can concentrate on what really matters. Remember that always being busy doesn’t necessarily mean you’re productive. Avoid distractions.
9. Analysis paralysis
Analysis paralysis: “analysing something so much before making a decision that we end up paralysed, without making any decision at all.”
With age and experience, you learn that it’s better to have an imperfect product on the market than a product sitting in the lab waiting to be perfect before it goes out. The first brings us money and feedback from end customers that will help us improve our product. The second doesn’t give us much. But be careful about taking this too literally.
The same happens with decisions on some matters. Sometimes we want to be completely sure about something, but we never will be. In time you’ll learn that you don’t have to wait until you’ve gathered all the information to act: you have to do it with 60 or 70 per cent of the information, because if you wait until you have 90 per cent, you’ll probably be too late.
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Featured image: BrokenSphere, CC BY-SA 3.0, via Wikimedia Commons.
