1. Value Your Time
In the early stages of your business, it is easy to give your time away. People value your expertise, but many are not willing to pay you for it. Be careful of the DIYers and the non-buyers. There are any number of people who are willing to take your time and the information you provide and then take things into their own hands. I have encountered this many times in my SEO service company. Now, my number 1 qualification for clients is that they have a marketing budget sufficient to compensate me for my time, and refuse to take on people I can’t help, or don’t understand the value of what I do, or a willingness to compensate me accordingly.
2. Don’t Shy Away from Further Innovation
When you find something that seems to be working, it is easy to get stuck in a rut and become stagnant. The number one strength of a startup is agility and strategic vision. You are small and adaptable enough to shift and pivot where the market dictates. While it makes sense to stick with what’s working, be careful not to get tunnel vision. While you may have found a market segment that has some fruit to bear, you may be ignoring the bigger picture and limiting the growth potential of your business.
3. Choose the Right Partners
The people who get in with you on the ground floor are the ones that are going to make or break your business. Make sure that your partners are as invested as you are (physically, mentally and financially). Take a hard look at what they’re bringing to the table and their unique value added to the project. Is it something you can, or want to do? Does their skillset provide a unique resource or value proposition for the company? Is this worth surrendering equity or creative control? Are they in it for the long haul? Is the value they add worth the hassle? These are all important questions to answer before taking on a partner.
4. Be Very Careful About Surrendering Equity
In the beginning, it is easy to justify surrendering equity. The company has not yet realized its potential, and someone willing to invest in your idea is flattering. However, make sure to weigh the long-term gains vs. the short-term ones. It may be that by taking the money, and surrendering equity in your business is really setting you up to fail. If you really believe your idea will succeed, then giving someone else a piece is really betting against yourself. If your company does realize its full potential, then that fast cash could turn into a fast walk through a furious wood chipper. Hamstringing your business with external demands from investors, pressure to perform, inability to innovate due to lack of creative control, or any number of possibilities can result from surrendering even a small amount of control of your company. Not to say that startup capital is always a bad thing or that all investors will steer you toward imminent death. I would simply suggest that you take a hard look before surrendering equity. They are willing to invest because they believe in your growth potential, so why shouldn’t you?
5. Educate Yourself
One of the biggest revelations I’ve experienced in my startup is realizing how much I don’t know. There are unique challenges that come along with being a business, such as taxes, marketing, making sales. When you are the whole crew, you have to do a little bit of everything. And let me tell you, this can be a humbling experience. Oftentimes, I have debated taking online classes for my MBA just to learn all of the things I need to know to manage my own business. Regardless of the way in which you go about it, you need to continually be investing in your business and in yourself. Your startup will go as far as you can take it.
Summing it all up
There are many pitfalls that arise when kick-starting your business. They are difficult to predict, even more difficult to avoid, and often frustrating to deal with. Hopefully this article can help you avoid some of the mistakes I have encountered, but bootstrapping your business is likely to take a herculean effort. However, with the right business model, and the right captain at the helm, it is possible to steer your startup out of whitewater and into successful, and profitable waters.
Author: Kirk Kerr is a marketing major from the College of Idaho. He balances working at his day job and his ambition of being on the Mount Rushmore of legendary entrepreneurs. When he’s not putting his nose to the grindstone, he enjoys sports videogames, binge watching Netflix, and button mashing on his Xbox One.