Entrepreneurs, whether starting the next Uber or opening a wedding planning service, all face some of the same basic challenges. I have seen many brilliant and talented individuals get trapped within the frustrating cycles of an underperforming startup.
The heart of today’s commentary examines some of the biggest challenges for many first time entrepreneurs. At some point, you will feel overwhelmed, but this is normal. You are building something that not only profits you, but also benefits your employees and customers.
My hope is the information presented in this column will help you recognize and overcome common issues facing many entrepreneurs.
Absentee Business Owner
An absentee business owner is when an entrepreneur does not actively participate (or insufficiently participates) in their business In the beginning, this can be disastrous. I have seen many entrepreneurs put a lot of work into developing an idea, working hard to acquire financing and putting in long hours to launch a startup, but then think the business should run on autopilot.
These startup owners don’t want to be bothered with the actual business. They will come in late every day—if at all—walk around all day with a cup of coffee in their hand, and leave early. However, when you are just starting, a successful entrepreneur will be the first person in and the last one out. He or she will oversee every aspect of the operation, and leave nothing up to chance.
Thinking Like An Employee
Many first time entrepreneurs have a hard time transitioning from thinking like an employee to thinking like a business owner. They want all the benefits and flexibility of being self-sufficient, but also want to leave work at work after 5 o’clock. You must understand the benefits of business ownership comes with a cost.
As an entrepreneur, you have to be prepared to do every job within your startup. Moreover, the days of working 9 to 5, and 40 hour work weeks are over. Especially in the first few years of your business, you will need to work harder and longer than many may realize.
Many first time entrepreneurs develop unrealistic expectations because of the success of a limited few. You are not Travis Kalanick, Garrett Camp, Mark Zuckerberg or Jeff Bezos. Disappointment can occur when comparing one’s self to extremely successful business founders. The results of these top entrepreneurs are not typical, and success will not come overnight.
We have all seen guys who seem unexceptional become outrageously successful—we have all read stories about the high school or college dropouts who became millionaires overnight. You may even personally know someone less talented than yourself, who created a smashingly successful business. Unfortunately, what is typical is most startups will fail. Keep your expectations in check to avoid becoming discouraged.
Image Over Substance
Some entrepreneurs firming believe in the mantra “fake it till you make it.” They invest a lot of capital in image over substance, forgetting that some of today’s top businesses started in a garage or college dorm room. The failure to keep your startup lean can cause an otherwise good business to fail—I’ve seen it happen more than once.
Good cash flow is absolutely necessary for a business’ ability to continue to exist, but many entrepreneurs get in trouble because they think they need to project a certain look and image. If you overspend in order to look successful, it could cause failure. Financial discipline is essential. Keep your spending tightly focused on essentials.
Poor Marketing Strategy
Some first time entrepreneurs believe in the idea “if you build it they will come.” That does not work. Other startup owners believe just creating a business page on Facebook, sending out some mailers, or passing out business cards is all they need to get the word out. These are good activities, but your marketing strategy needs to be more comprehensive.
You also need to target your marketing to those most likely to purchase your product or service, but successfully targeting a specific audience will not exclude those who do not fit your demographic. The idea here is market to those who fit your customer profile, which will save money and improve your return on investment.