3 Startup Mistakes to Avoid At All Costs

They say 95% of startups fail.  Attempting to build a company from the ground up is difficult, especially if you have little or no prior experience in business world as an entrepreneur.

Here are 3 startup mistakes you should avoid at all costs in hopes of being in the 5%.  

Doing It Alone, Without Involving Others

Saying startups are stressful is an understatement. If you start a business alone, without a plan on who is going to do what you're not good at, you'll likely burn out. You're not an expert at everything, and you need the find the experts to get their feedback, get them involved, and possibly hire them if that is the right decision.

You also need advisors to help you figure out when you need an employee, or just an online tool that costs $10/month that you don't know about yet.  If you're in Colorado, or planning to move here to launch your business, check out our mentorship program. 

Treating The Business Plan Like Homework

A business plan serves to guide the startup towards the right direction of staying aligned with the entrepreneur's vision. Here are some questions it should answer:

• what is the purpose of the company?
• who are the customers?
• what problem does it solve?
• who are the competitors and what are they doing?

While these questions don't cover every aspect, a sound business plan should at least touch on every aspect. It's important you know where you want to go and that you've done extensive research on exactly how you expect to get there.  It should be about 90% accurate.  This is especially true when you start seeking out angel investors or venture capital. Without a plan, expect the answer no 100% of the time, instead of just most the time ;)

Mismanaging Money

If you've just started a business, chances are you're not making much money from it right off the bat.  If fact, if even one person has given you one dollar, that's big success, so congratulations! It may also be the case you have limited amount of cash to put into your startup. Therefore, you need to properly handle all your resources and not overextend.  I was just talking with one of our Handshakin mentees on not over spending on your logo off the bat.  That can come later.  

You only need your logo, and so many other items, at only 90% to move forward... the remaining 10% will cost you too much when you are just starting.  Grow the company and then find world-class team members who are expert graphic designers later to complete that 10%.  

In addition to making up your salary, the business requires additional overhead.   However, what happens if a business suddenly faces an unexpected disaster or has to undertake a costly change, but has insufficient funds set aside? This will more than likely happen to you.  With bootstrapped and many angel funded startups, you can't afford that 10% until you are fully employed and full-time on your startup.  Without proper money management, your new business may fall long before you even pay yourself $100.  

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Also, big shout out to everyone who has given me awesome support, mentorship, and of course those who had stickers that can be seen on the computer in the picture!  You're awesome Colorado!