Here at IDEA, we work with first-time entrepreneurs on a regular basis. Our job is to provide a network of resources as we guide these budding entrepreneurs through all the steps necessary to propel their ideas into real, successful businesses.
We decided to compile a list of the top ten entrepreneurial mistakes we see students make as they learn the ins and outs of what it takes to survive as entrepreneurs in today’s complex society.
1. Not having a clear focus. The most important—and often most difficult—part of starting a business comes down to knowing how to prioritize and understanding the tasks involved.
2. Hiring the first person they interview. Venture Capitalists invest in teams, not just business ideas. It is crucial to put the time and energy into bringing the right people on board.
3. Being too repetitive in their Business Plan. Keep in mind that while repetition can be good, too much repetition is a turn-off to potential investors.
4. Not being open to constructive criticism. Entrepreneurs sometimes fail to realize that constructive criticism is an invaluable tool for them as they develop their businesses. Learning to see it as positive feedback can be largely beneficial.
5. Rushing into funding. Entrepreneurs often pursue any and all sources of money before they have thought through their venture. Planning always leads to more intelligent use of funds.
6. Getting publicity too fast. Publicity is all about timing. Waiting until your business has stories to tell and not just dreams to share will yield more effective coverage.
7. Not communicating with customers. Entrepreneurs sometimes love products more than customers. Doing adequate market research will help you understand if you are actually meeting the needs of your customers.
8. Not taking it step-by-step. Entrepreneurs often don’t know where to start and how to set milestones, so they try to do everything at once. Remember that there is a great deal of value in milestones. What tasks are more important than others? How do you select milestones?
9. Incorporating too soon. First-timers will often rush to incorporate their businesses before they should. It is beneficial to actually start business ventures before fronting the costs of incorporating to ensure that everything goes according to plan.
10. Forgetting that entrepreneurs need to eat, too. Many entrepreneurs, particularly students, will draw up a three to five year plan in which they will not pay themselves a salary that allows them to survive after they graduate. Remember that entrepreneurs have needs too (like eating!) that simply cannot be ignored when planning a venture.
Dan Gregory, Chris Wolfel and Evan Stein contributed to this article.