Without planning, you should never start a company. Just because someone told you to jump into entrepreneurship and then handle things as they come; doesn’t mean it’s the right approach. Unless one is exceptional, they can’t ace GRE without preparation. Same goes for startups as well; most people need to prepare for things, in order to succeed at them.
I have interacted with several entrepreneurs who started up without any preparation. Enlisted are some of the mistakes they made, from which you can learn.
Starting a company and then finding customers.
Your approach should be to first find a paying customer and start the venture only when assured of work. Talking to prospective customers will help you understand the market better, which you’re about to enter. Nothing like it, if a hundred people can give written assurance that they’ll buy your product, after it’s developed.
Hiring people to do all the work.
You can’t simply hire people thinking that they’ll do all the work, because you’re paying them money. Be the first employee yourself and hire only when you have so much of work that you can’t do yourself. Also, study the industry you’re getting into, to increase your chances of business success.
Starting a venture with the intent to sell it.
If you want to sell your startup in future, then it simply means your heart is not into it. Try to do something that you believe in so much, that you wouldn’t want to give it away to anyone. The founder of Dropbox turned away a hefty offer from Steve Jobs, as he didn’t want to compromise on his vision. The founder of WhatsApp, after selling it to Facebook, ended up investing in Signal. Acquisition is something that should happen only if you meet someone who relates to your vision, can probably do a better job, and pay a decent amount for it.
Assuming that your corporate experience or degrees will make you succeed.
Your past won’t matter as much as you’re probably thinking. I know one guy, who quit his high-paying job in a big city, to startup in his native town. He started a web services company, as he couldn’t get local people in other technologies. His strategy was to hire people, bid on projects, and pay them money to do all the work. It’s been 4 years and he’s still not profitable, at times paying salaries from his past savings. People with lesser educational background did better than him, as they were more hands-on in their approach and understood the domain better.
Starting a Private Limited Company, without looking at other options.
There are a lot of compliances which have to be done in a Private Limited Company, requiring your precious time. You can instead contemplate setting up a Limited Liability Partnership, which has its share of benefits, and minimal compliance requirements. In future, as and when the need arises, you can convert your LLP into LTD.
Not consulting a good CA beforehand.
CA is one aspect you must never compromise on. If you start with someone who doesn’t know the job properly, then it can create a lot of mess later. An experienced professional can help you save costs and also avoid penalties later.
Making something that will be used by millions of people.
Your approach should be to start small and iterate gradually. Focus on few initial customers and satisfy them well. Only after that, you should get scalability into picture. Kindly avoid making a highly scalable solution, that no one wants to use.
Starting a company just because you want to be an entrepreneur.
Please start your venture, only after researching things well and knowing about the risks associated with it. Remember, when in entrepreneurship, you are not your own boss.
Getting a co-founder without due diligence.
Partnerships are easier to start, difficult to sustain. A venture can run into trouble due to ego clashes and other monetary aspects. It is important to take several factors into consideration, before signing someone as a co-founder.
Having a company for the sake of it.
So many companies exist out there, what makes your firm stand out? Before starting the company, write down the values and what differentiates it from the rest. Form a solid vision in the beginning only. If you’re entering an already competitive field then this is very important. Prepare a pitch where in 30 seconds you should be able to convince potential customers, why they should buy from you. This will help you a lot as you grow your startup and have to hire quality people.
Not deciding on how much to invest.
You need to decide on a certain amount, to invest in your startup. Give yourself a time frame as well, within which you’ll try to achieve your goals. Give it your best shot after that, to make it succeed. In case your venture doesn’t do as well as expected, then it’ll be time to execute Plan B.
Not being thoughtful enough.
Don’t start something with intent to do something else later. Consider this as your last ever venture in life. What is it that you would want to do? Write down all your ideas and think deeply. Take your time. You don’t need to start 10 businesses at once, just do that 1 thing with all your might.
Make your startup dreams come true
Do you have any queries regarding how to startup? Write them in the comments box below.
(For confidentiality reasons, names of entrepreneurs and their companies haven’t been mentioned in this article).
Yaju Arya Dot Com 