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5 More Mistakes Entrepreneurs Should Avoid When Starting a Company 

According to a 2015 Forbes.com article, nine out of every 10 startups will fail. That’s the harsh truth. While this statistic may discourage some entrepreneurs, it should also encourage them to learn how to avoid certain mistakes before building a startup.

Here are five mistakes that entrepreneurs should avoid when starting their own company. The more you know about them, the less of a chance you make them:

  • Clinging to a flawed idea. Following your gut may work for some situations, but not here. Follow the data. Consider running experiments or hiring a focus group to track how much it costs to acquire each customer — and if small tweaks make that cost rise or fall. Also, evaluate how your product fits in the market before launching it.
  • Doing everything yourself. Rather than give up control and trusting others with responsibilities, you try to do everything yourself. This will inevitably lead to failure. “Teams fail when trust fails,” Elton Rivas, founder of accelerator program KYN Group, says. Delegating the workload to different team members will build team trust and will help the company grow.
  • Believing money solves everything. Struggling entrepreneurs think that if they can raise enough money to reach their next round of financing, their problems will disappear. A startup with too much capital and no business model will quickly go belly up. “If your business model isn’t sound, throwing money at it is not going to work,” Carter Cast, professor of entrepreneurship at Kellogg School of Management, says.
  • Underestimating how long sales take. According to a 2014 CloudKettle article, startups have to realize that sales take twice as long as you initially predict. Cast says that he’s seen companies run out of money because they’ve been too aggressive in estimating their timelines. Make sure to budget for sales that take longer than expected.
  • Fear of failure. Nobody wants to be known as a failure. But if your startup attempt fails, don’t see it as a failure, but rather as a learning experience. If fear of failure interferes with your mindset, chances are you won’t take risks. Yet the life of a startup is about taking daily, calculated risks. Don’t be scared to fail. Once you learn to overcome your fear of failure, you will be able to guide your company in the right direction and will grow as an entrepreneur.

 

About Matt Niksa

Perhaps the youngest person to ever write for Financial Poise, Matt Niksa was an editorial intern with the company during summer 2016. Prior to that, he was a contributing writer for AOL and Medium. Subsequent to his time with Financial Poise, Matt was a correspondent with the Palo Alto Daily Post.

View all articles by Matt »

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