The Entrepreneurial Compromises That Prove to Be Fatal for Start-ups

The Fatal Entrepreneurial Compromises

Offering Equity for Investment

The owner and founder of Calgary Home Builders say, “You are mistaken if you think offering equity is the only way to get investors interested in your business idea.” Today, you have more than one way available to get the investments you need for your startup. Take the example of online crowdfunding platforms where you can take investments from people from all around the world. These do not venture capitalists or big sharks. These are individuals who just like your idea, and with their micro-investments in your business, they are only trying to support an idea they like.

They might not even demand anything in return for the investments they make. Of course, they don’t make huge investments at the end of the day. Their investments can be anything as small as $5 or as big as thousands of dollars. However, since you are asking for contributions from people from all around the world, it is the quantity that matters more than the size of each investment. What you can do to return the favor to angel investors is to offer them something valuable in return. You can offer them a sample of the product or give them early access to the product. Let your creativity do the work here.

Not Taking Numbers Seriously

If you are not comfortable pitching your idea on a crowdfunding platform, and you think taking investments from VCs is your only way of supporting your startup, you have to take your numbers seriously. Owner of the company known for making the best business cards in Calgary has this to say, “For investors, you are not even a businessperson or an entrepreneur if you don’t know the numbers. In fact, your lack of knowledge of numbers shows that you are not even capable of being a businessman or businesswoman.” Keeping those words in mind, you have to be extra careful with numbers and learn them by heart.

In reality, when you are involved in your business and paying attention to everything, you remember the numbers automatically. You don’t have to treat the numbers as a class lesson. When you are the one taking care of every activity and operation within the business, you know the numbers by heart. When you pitch your business idea to the investors, these investors expect you to blurt out the numbers as soon as they ask for them. If you don’t know what your profit has been in the past few months or where your business debts stand, your investors will not take you seriously. Chances are that your investment will be rejected entirely.

Filling Empty Seats

When you start a business, and you have a small office, you want to hire people as soon as possible. You want to delegate responsibilities, and so your hiring process is on fire. What you don’t realize is that hiring employees is not the solution to all your problems. In fact, you don’t even have to hire employees in some situations. When you are too serious with hiring employees, you just keep filling the vacant positions in your office. You don’t care much about the experience, skills, and talents of the individuals. Your office looks filled, but you have to pay the price for this mistake at the end.

Today, entrepreneurs cannot make any excuses when it comes to hiring the right people. “Why hire people, afford their monthly salaries, pay for office rent and space, etc. when you can just outsource the entire department for a small monthly cost,” says the owner of Edmonton Movers. It is true: you can outsource entire departments today thanks to modern technology. The department that companies outsource the most is the IT department. Hiring IT professionals and paying their monthly salaries along with affording the server and networking infrastructure can be back-breaking for startups.

You can outsource your IT department and all of its responsibilities to the IT management services. These services are affordable with a small monthly fee. The best thing is that you can take advantage of the services of the best professionals in the industry through outsourcing. On the other hand, the employees you hire might not be an expert.

Prioritizing Rest

This might sound bitter, but it has to because it is the truth. You are not going to find a lot of time to rest when you are a new business owner or an entrepreneur. Some people like to boast how they can take enough time to relax and do other things despite their business responsibilities. This might be true in some people’s case, but this is not how things happen in most cases. When you start a business, you even have to say goodbye to your good night sleep. If you prioritize rest and relaxation as a startup owner, you are going to pay the price for doing so.

The problem is that many people want to start their businesses only because they want things under their control. Furthermore, they want to start a business that can generate money while they are resting on the beach. The owner of a famous SEO consulting company says, “You think you will find time to rest for 10 or 12 hours when you start a business. I say you have to be thankful for your luck if you can even find 8 hours of peaceful sleep as an entrepreneur.” The truth is that you will be spending more time working than you will be spending resting when you are the owner of a startup.

Not Setting Targets

You have to set targets for your business and use the right tools to measure your progress. Setting goals is not enough. You have to have a way to measure your growth as a business to make the adjustments on the go. When you start a business, you have to have financial goals. You must set a target of when you will achieve a particular financial position in the future. You also have to have a target of your expenses. When it comes to measuring, you have hundreds and thousands of tools that you can use to measure your progress.

In these tools, you can set the metrics that will decide how much of the target you have achieved. At the same time, you can find out about the factors that are preventing you from achieving your set business goals.

Not Having a Value Proposition

There is a vast difference between not knowing your business’ uniqueness and not being able to communicate your business’ uniqueness with your target audience. Sometimes, your company stands for something truly different. However, you just don’t know how to approach your target audience and tell them what you are all about. As a brand, you must have a strong value proposition. You have to get closer to your target audience to know why they pick you over other brands. Once you have realized the unique value your business offers to the customers, you have to find a way to communicate it with your target audience.

You can even seek professional help to come up with a value proposition for your business. You must come up with a sentence that can instantly tell your customers, new and existing, what your business can deliver to them. Keep the words of your value proposition punchy and easily understandable. The only way to create new strategies for your business is to know your unique value. How can you come up with a business strategy when you do not even know what your customers want? So, hire professionals, talk to the internal employees, do on-field surveys, and conduct online polls to understand what your customers expect from your brand that they don’t get from other brands.

Bottom Line

There are many other things that you have to pay attention to when you are an entrepreneur. Just having a unique business idea is not enough. Even the most fascinating ideas can go completely unnoticed when you don’t know how to convey them to your customers. It is like an impressive magic trick performed in such a wrong manner that the audience does not know what they had to clap for. If you are an entrepreneur or are aspiring to be one, make sure that you don’t commit the fatal mistakes stated above.