Being bootstrapped and starting up isn’t easy, especially when mistakes can cost you a large portion of your operating budget. If you are part of our Secret Academy then you heard the CEO of D2 Forged speak as to how one mistake almost cost him everything. Mistakes in early start up stages can be harsh and punishing. Here are some mistakes that we feel you should watch out for early on rather than crash and learn.
Test the market first.
While we all have great ideas and belief is key to starting up, make sure to take an extra moment and test the market, even before you get started. Try launching it through a crowd funding site and see how the market responds. Original Grain Watches Co-Founder Ryan shared how he raised over 500K for a watch he only dreamed of making and validated his idea as well as got a hefty start monetarily. Testing is key and can help you reduce mistakes and costs significantly. Many who share their experiences vouch that testing not only validated their ideas, but helped them decide on improvements they hadn’t thought of earlier.
Don’t over promise and under deliver.
One of the most common mistakes entrepreneurs make is allow their hunger to get a hold of them and as a result become so blinded to winning that they will do anything to win a client. Over promising leads to under delivering and gives you bad rep early on, something many cannot afford. Charging too little or setting expectations too high can be a very costly mistake.
Have a board of advisors you trust.
While validating your idea is key, sometimes running the plan by your trusted board of advisors can be a critical way to eliminate spending on the wrong things. If you want to lower the possibilities of failure, surround yourself with individuals you can go to for advice or feedback. Spending thousands in the wrong places or simply overpaying for things can hurt any startup. Have a network of people who do what you do and can help guide your decisions.
Don’t automatically outsource. Look locally first.
Outsourcing can seem like a cheap alternative to finding local labor but can often make you lose big money and time. While it may be a fit for some, always look for people locally first that can provide quality work at affordable prices. You will be surprised as to how much faster you move and how cost effective it can be to find talent locally. Don’t sacrifice quality as it will only make you do the same work multiple times and perhaps will make you lose money and clients.
Make data based decisions, not emotional one.
Its very easy to get emotionally involved in your business and make decision based on your belief, rather than data but it can cost you, so exercise caution. While many new entrepreneurs are excited about improving and invest time, money, and resources on tweaks to increase conversions or engagement, many do so without critically identifying their analytics. Tom Cruz of Apto HQ shares the tools he uses to ensure this never happens in this tutorial here.
Between analytics data, social media, and more, there is enough to help you improve what matters and in the right context. Dane Maxwell also ran into issues with his foundation when he tweaked one piece of the sign up process which caused a huge decrease in sign ups, rather than increase.
All in all, just make sure that you don’t fall victim to some of these well-known costly pitfalls that most new entrepreneurs fall in.