The Most Common Missteps of Start-Ups
While start-ups face many impediments, I’ve concluded that just a couple missteps can cause the greatest harm:
- Lack of personal funds to meet personal expenditure commitments
- Shotgun marketing efforts
- Giving up on the venture too early
For the most part, the first and last bullet items above are linked as “cause and effect”. If the entrepreneur starts a business venture without a sizable one-year cash reserve, he or she will struggle to cover personal expenses.
At a minimum, these include monthly housing, living expenses, transportation, and child rearing costs. A real asset for the start-up’s chance of success is having a gainfully employed spouse to cover these expenditures.
Without reserve funds or a steady income stream, the entrepreneur will often “close the doors” prematurely as he or she looks for more immediate and reliable earnings.
The other significant drain on early profits (or personal funds) is earmarking too much for advertising and marketing efforts in the hopes of generating immediate revenue. These business tools work but usually over the longer term.
Implementing “smart” and effective promotion efforts is the key from the very beginning. And those which showcase an owner’s expertise or set a business apart from competitors will generally have the best results. In this case, less is definitely more.
