Starting a new business is a big challenge.

And most entrepreneurs, myself included, jump into starting a new business with little to no training.

Here are what I consider to be the top three entrepreneurial mistakes to avoid:

1. Underestimating the Importance of Marketing

Most founders start a new business, especially service businesses, with one or maybe two clients to start. 

They usually get them through networking or a referral.  

It is always exhilarating to get your first client and the tendency is to want to focus completely on them to make them as happy as possible to earn another referral. 

The problem is 100% of your current revenue relies on one client. It is a terrible position to be in and even if you overdeliver, there is enormous revenue risk in the situation.

In order for your business to grow, you must spend a disproportionate amount of your time on marketing. Even if you have large enough savings and can hire marketing help, it will still require the founder’s time. No one understands the promise of the company better than you do, and the marketing team will rely on you to help them until a consistent lead generation system is in place.

Marketing will buy you the time you need to find the right product/service market fit and to go from an ok product/service to something that is remarkable. 

Pro-tip: You do NOT have to have the best product/service in the world to be profitable. With good marketing, even mediocre products/services sell like hotcakes. If you don’t believe me eat lunch in any big chain fast food restaurant and tell me its the best you ever had. Not!

2. Longterm DIY Attitude

At the beginning of a startup, the founder does everything. They do sales, marketing, fulfillment, and everything in between. But where this becomes a problem is when the founder is trying to hang on to doing everything as the business grows. 

At some point, you have to begin asking the question, “Who can I hire that can do this better than I can?” And after you hire them, you have to let them be responsible for it. Let them do their job. Most likely, they will surprise you with how well they do.

There are certain things in the business only you can do. It is vital to the long-term success of your company that you figure out what those things are and delegate everything else to either employees or contractors.

Think of it as buying back your time with experts who are more skilled and knowledgeable than you.

3. Poor Financial Planning

Businesses run on money. Families run on money. 

If there is no money, there is no business and there will be no money to take home for you or your family.

There are two financial metrics every business owner must know:

How much cash do we have?

How long will that cash keep the business alive?

And these two questions will take you back to tip #1. How much can we spend on marketing to grow?

Please let me know your thoughts.

Until next Saturday!