3 Mistakes to avoid, when starting your own business as an individual
You are full of ideas and more than motivated to start your own business? Good! There’s just one tiny little detail to take care of: Founding a startup is anything but easy. Even for experienced engineers, creatives and people with deep, industry-specific knowledge, the chances of success aren’t great. Still convinced that your business model will work? Great, because willpower and self-assurance are crucial in this process and cannot be lacking. But still, there are several mistakes to avoid in order to improve chances of success. Some are obvious, others less so. In no particular order, check out our checklist of three mistakes you would otherwise probably make in the first 6 months and can now avoid:
#1: Don’t overestimate the idea, work on the product first.
You have an amazing idea you think? Congratulations – although, chances are 100 other people had the exact same idea this morning while taking a shower as well. And truth is, any developer who is able to build a product by himself will already have hundreds of ideas, some of which they are working on already. So, the crux of the matter here is: you need to convince someone to build your product. How? Well, pay them. A lot. In case your financial situation doesn’t allow that, it might be an option to convince a developer by presenting a self-built-prototype to them or by introducing them to a well-orchestrated business model.
#2: Trying to meet investors at the wrong time/for the wrong reason
The fact that you and your business need funding is self-explanatory. Of course, you do. But don’t make the mistake of putting it on some kind of checklist which you just want to get done with. Most young founders are used to having objective measures of their achievements and see raising funds as a necessary goal. Even though it’s an understandable approach, try to change your perspective. Only meet investors when you are actually safe with your product and business idea. Also, an investor is your partner, not just some kind of cash cow! And by the way, capital investors are not your only option. Actually, there are several funding solutions for low capital startups.
#3: Don’t hire too quickly and don’t forget about taxes
Whenever business people have a problem, their mind provides them with two options:
- Pay someone with domain expertise to solve the problem. Or…
- Pay a consultant to tell you to pay someone with domain expertise to solve the problem.
Neither of these suggestions should be an option for you. To be clear: the first few employees will determine the future of your startup. So even though you might be thinking that having lots of staffs is a good thing, it’s time for a rethink. Roll up your sleeves and try to solve the problem yourself first.
Also, taxes can be quite challenging for business owners since they are tied to several terms and conditions. Did you know for example, that startup costs are only deductible if your business does indeed start up? No? Well, be prepared to invest some time into research on taxes for startups.
Checklist completed but still looking for a great location to found your startup? In that case, check out our series on promising tech startup hubs worldwide.