Everyone makes mistakes; it is inevitable. But in business, missteps can be detrimental, putting your livelihood at risk. According to a report on the Small Business Administration site, small businesses only have an approximately 48% chance of surviving five years. This makes it imperative that you make calculated decisions and avoid the mistakes that can cost your business more than it can bear.
Not every misstep is immediately obvious: Some mistakes take time to brew before they become visible. This means that it is particularly important for entrepreneurs first starting out to pay attention to the challenges others have faced, as well as the regrets they now have.
That’s why 11 members of Young Entrepreneur Council have weighed in on some of the mistakes they've made or seen when they were first starting out, something they now regularly ward others about. Here’s what they said:
1. Ensure Transparency Among Co-Founders
If you have co-founders, make sure everyone is transparent and open about the amount of risk and reward each founder has. Equity should be divided based on time spent but also the amount of risk each founder is taking by pursuing the project. Sometimes founders are OK with giving up more at first, and it almost always leads to conflict if they aren’t compensated for it. - Erik Skjodt, Medean
2. Hiring After Growth Instead Of Beforehand
We are growing rapidly and were waiting to reach revenue milestones before hiring in order to manage cash. This left our team frustrated, stressed, behind deadline and error-prone — not the recipe for a great customer experience. Yes, hiring ahead of time costs more, but we make up for it in improved customer loyalty, team culture and staff retention. - Saloni Doshi, EcoEnclose
3. Learn How To Play The Long Game
The biggest mistake was the misconception of “making it” happen quickly. I needed to learn how to shift focus from thinking short term to learning how to play the long game. - Will Robins, Manscaped, Inc.
4. Know Where Your Money Is And Outsource Early On
The biggest mistakes that I made early in my entrepreneurial career are as follows: One, I did not know where my money was. I wasn't clear on where the money could be created most efficiently for my business. Two, I didn't outsource early enough to other professionals. I overcommitted myself to the business and tried to do it all. Three, I did not know how to run a business, the right way. - Alec Friel, Prosperity Flow
5. Lay Out A Clear Path To Your Goals
The biggest mistake I've made as an entrepreneur was letting myself get complacent and keep my business on autopilot, without sitting down and thinking about the direction I actually want to head both personally and professionally. Setting goals and deliberately laying out a path to achieve them has been a game-changer for my business and my sanity. - Cole South, SDDC Goods
6. Understand Your Business Financials
One of the biggest errors I made early on was not understanding my businesses financials in depth. Once I was able to drill down on what percentages of my gross revenue were expenses I was really able to fine-tune my business and processes, which in turn created a healthier, more long-lasting business - Jared Weitz, United Capital Source Inc
7. Accept Failure To Speed Up Decision-Making
One of the biggest mistakes I made as an entrepreneur was not being decisive. As a kid in school, you’re rewarded for being a perfectionist: Why turn in your essay unless you’re sure it’ll get a good grade? But in the entrepreneurial world failure is often the most efficient route to success. Once you realize this, you’ll free yourself to make decisions quickly without fearing the outcome. - Eric Saleh, Circle for Roommates, LLC
8. Don’t Spread Yourself Too Thin
Without focus and dedication, any business can fail. With the overall fail rate of new businesses, entrepreneurs need to be laser-focused on success without distraction. Entrepreneurial minds often find themselves trying to do too many things at once without the proper resources or bandwidth to achieve the desired result. Keep your eye on the prize, execute and then expand. - Bryan Shetsky, Lamark Media