Lesson 11: Avoiding Common Mistakes
What You’ll Learn: Failure is a natural pathway to success and is inevitable as you strike out on your own as an entrepreneur and small business owner. Bold ideas are, after all, risky. This module walks you through the life lessons of someone who has been in your shoes and shows you how to avoid some of the setbacks and struggles along the way.
Avoiding Common Mistakes (continued)
Grain of Sand #9
Passion alone isn’t enough, but it is an essential ingredient. If you’re not putting your all into a business that you love, are passionate about, and have experience and expertise in, then why waste your time? Most of the people I have spoken with who’ve decided to pursue entrepreneur adventures started with their idea as merely a hobby. Unlike me, who thought that business could be a hobby unto itself, these individuals decided to give their hobby – their passion – all the focus and attention it deserved to make it a real business.
If you’re not having fun, you might be in the wrong space. Starting a business is going to be hard work. But, at the end of the day, if this is the space you want to be in, you have to love what you do. I tried to start a limousine business once because I love people. I love socializing with people, talking to people, meeting random people. However, I didn’t love driving, and I could barely find my way around a town that I’ve lived in most of my life. My focus, my energy was in the wrong place. Although I got to meet some fantastic people during my short time as a limousine business owner, I had to convert my passion for people into an all-around passion that I could build a business on.
Grain of Sand #10
In some of our startups, we partnered with friends or colleagues that we knew would bring a lot of great expertise to the table. We set up the business with all of us as shareholders and built the business together. After some time, a couple of the partners wanted to take other paths and left the company; we either bought them out or they simply stayed on as ‘passive partners.’
Fast forward a couple of years – we had a $1 million investment coming our way, a very lucrative deal. We were golden. Except, two of the passive partners didn’t think it was the right investor. They were passive partners, but when they left the business, we didn’t pay attention to the ownership structure of the company. The passive partners still had equal votes, so they could rightfully veto the investment and they did. We didn’t get the investment and ended up having to restructure the company through Chapter 11. This took time and effort that created missed opportunities and lost revenue. Make sure you think through how the business makes strategic decisions. If your company has more than one shareholder, then it is essential to set up a shareholder agreement. If the ownership structure changes, make sure the agreement is updated. And do it while you are still “friends.” When you need to enforce the agreement it is likely too late. My husband lost his first venture because of this.
So, there you have it—my 10 grains of sand.
I say all of this not to discourage you, or make you feel as though you can’t make it in this world of entrepreneurship. My goodness, we need more people to start businesses, not less. People like you, people like my husband and I who have the passion to be entrepreneurs.
Digital Print Version
Hopefully, these lessons learned – these grains of sand – will help you avoid the mistakes many people make in the beginning. You can learn a lot from someone you view as a failure, so don’t take those people off of your list of individuals to consult with as you formulate your business idea. It’s okay to learn from other’s mistakes, even if you think you are smarter than they are or have more resources. None of that will matter if you don’t take the necessary precautions to put energy in the right places and build a business from the ground up to have a strong foundation.
I hope something I shared helps you become the successful business person that you are meant to be. Whatever that definition of success may mean to you. Good luck. Stay healthy. Stay safe.