In most cases, a successful entrepreneur is a serial entrepreneur. Why?
It’s not just because people want to build a great business and then sell it at a profit…
…it’s because successful business people don’t generally succeed on their first attempt. Do the names Vera Wang, James Dyson, Jeff Bezos, Milton Hershey, or Arianna Huffington ring a bell? These are all examples of wealthy entrepreneurs that didn’t succeed the first time around.
Think about it: There must be all kinds of valuable information that we can learn from entrepreneurs that were successful in their very first attempts at business.
Right? But by comparison, how much can we learn from successful entrepreneurs that have also made a lot of mistakes along the way? Arguably, people who know both how to succeed and how not to succeed have a lot more valuable information to share with the rest of us.
Entrepreneurship: What Not to Do
John Osher is the creator of Cap Toys, a company that he sold to Hasbro Toys in 1997. After selling his $125 million-per-year baby, Osher came up with a definitive list of things not to do when starting your own business. The following “do not dos” are included in his 17-point treatise:
1. Fail to Research the Idea to Make Sure It Is Profitable
The top reason startups fail is the lack of market. It seems like a simple mistake to correct…
…nevertheless thousands of entrepreneurs plow ahead with their business idea…
…without bothering to research whether or not there is a market niche out there for the idea.
If there aren’t enough customers, the idea will never be profitable no matter how amazing it is.
2. Overinflate Your Overhead
It doesn’t matter whether your startup exists in the virtual world or the brick-and-mortar world, there are always overhead. That doesn’t mean you need to spend money on every single one, however.
For example, MOBE didn’t start hiring employees and buying office spaces until it had been very profitable for several years. If Matt Lloyd had brought in a team of a dozen web designers, salespeople, and writers, and rented office space for them and himself during the first year of business, he would have been broke within months.
Start with the bare minimum that you need, and expand as necessary.
3. Bring in Unnecessary Partners
There are people who will make a world of positive difference to your business and people who will not.
Don’t take on partners just because they seem interested in your idea. Osher says:
“Too many times, the guy with the idea takes on all his friends as partners. Many people don’t provide strategic advantages and don’t warrant ownership. But they’re all going to get 25 percent of the company.
It’s totally unnecessary, and it’s a mistake. Before people are made partners, they have to earn it.”
4. Stop Troubleshooting
“If you choose to not deal with an issue, then you give up your right of control over the issue
and it will select the path of least resistance.” So said Susan del Gatto, author of Creating Balance in a World of Stress: Six Key Habits to Avoid in Order to Reduce Stress.
An entrepreneur has to stay on top of issues as they arise so that the business can continue to run unimpeded. The second that you give up troubleshooting, it’s all over.
5. Lack an Exit Plan
Even during those first few steps of starting a business, experienced serial entrepreneurs already have an exit plan in mind.
They may plan to keep their company private so that they can keep the profits to themselves, or open it up to the public to get the most out of investors before quietly packing up and leaving for the Caribbean.
If you don’t go into your business with a clear exit in mind, it will be difficult to move on when and if the time comes.
6. Tackle Every Task Yourself
Even though you need to keep costs low, you won’t get much done if you don’t have help. Start small, with just one part-time assistant, and go from there.
The fewer administrative tasks you have to handle, the more you can focus on the money-making activities that will grow your business and allow you to stay in the black.
Learn from Experts Who Have Seen and Done It All
A serial entrepreneur is someone that knows the ins and outs of starting, running and selling a business.
Serial entrepreneurs have mastered the art of growing a business from the ground up, and therefore have a lot of wisdom to impart to current and aspiring entrepreneurs.
Their wisdom can help you secure your business and prepare for common issues before they happen, so always keep your ears and mind open.
Curated from mobe