Let’s be honest: nobody likes to talk about mistakes, especially when they concern their own start-up. We could learn a lot from the small and big belly spots of others. We’ve been listening around in the start-up community and collected some of the most common startup pitfalls- so you don’t have to go through them.
- Don’t listen to your gut feeling
It sounds completely banal and yet many founders overlook this basic rule. As self-employed you have to make big and small decisions every day. Many of these decisions you can make with your knowledge in the best possible way. Then again there are certain situations in which your mind is not sufficient, for example because the outcome of a decision is completely open. “Should I hire person A or person B? Should I accept the tempting offer of a competitor? In everyday life we simply trust our gut feeling in situations with an uncertain outcome. Why? Quite simply: Because it is the sum of our life experiences. What serves us well in everyday life should not be left at home in business either. You have a very bad feeling about an applicant, even though all application documents look great? You don’t trust the big promises of a potential business partner, although you can’t explain it to yourself? Listen to your gut feeling, it will show you the way if your mind can’t! Thus when you are ready to set up your LLC for your startup, first read this review of Legalzoom vs Incfile.
- Blindly trust investors
Some founders seem to regard investors and business angels as generous patrons who distribute their money to the start-up community out of pure charity. Even if this is true in exceptional cases, most investors are successful businessmen who have nothing to give away. They invest their money in projects that they hope will generate growth. They secure their share of the cake through appropriate contracts and certain rights as creditors in the event of failure. Whoever works together with an investor or a business angel therefore always gives up a part of his own autonomy. There is nothing wrong with that, on the contrary: in many cases an investor can be the key to your company’s success. The important thing is not to forget: Those who open the door to investors cannot throw them out again at will. And: the more difficult your financial situation, the greater your dependence on the conditions of others.
- Wrong budgeting
Enthusiasm prevails in most start-ups, especially in the initial phase of a start-up. And that’s a good thing, because the pink glasses will compensate you for nights and weekends in the office, while your friends enjoy their beer or laze around the lake. But at the latest when it comes to money, it’s time to take off your pink founding glasses for a moment. Founders also have costs – and these are usually higher than newcomers suspect. Not only the rent for the office has to be paid, but also costs for technical equipment or for the services of others. One should always calculate also legal assistance with possible legal questions of dispute. In addition, you must still eat, live and dress warmly in winter. All this must be taken into account in your budget if there is not to be a rude awakening during the first year. Even if it can hurt sometimes: It is much better to work with a solid database from the beginning than to handle completely unrealistic numbers and notice it when it is already five to twelve.
- Misjudge your own resources
Anyone working in a large company usually has more or less clearly defined tasks to perform. As a founder, however, you suddenly not only have to fulfill your job, but are girls for everything. Many young founders tend to underestimate the multitude of activities that go along with it. From screwing the office furniture together to evening networking to sorting the bank receipts or training the first employee. If you have enough money to outsource all these activities, you can sit back and work on your own product. For all others, the rule of thumb applies: at least one third of the available working time of a founder is spent on activities that have nothing to do with the further development of one’s own idea. Calculate that accordingly!