By Mason Cole
Launching a startup is no easy feat, as the path to success is cluttered with fatal mistakes. The challenge is that these mistakes are easy to commit. Additionally, it is nearly impossible to be an expert in every facet of building a new company. While an entrepreneur may be an expert in one category, many have little to no experience in the business world. Challenging problems will surface while nurturing a rising enterprise, and the best way to evade disaster is to be prepared.
Poor Hiring Decisions
No one is perfect at everything. Properly establishing the infrastructure for potential investors, financing and legal issues can contribute to a significantly healthier future. Should the founder of the startup not have expert-level knowledge of a core facet of running a business, they should seek out a business partner and employees to complete the team. Otherwise, the entrepreneur may find themselves consumed in activities that are not contributing to the growth of the company.
When finding a business partner, it is crucial to look for qualities that round out the partnership. Picking the wrong person to go into business with can be a fatal mistake for a company. The best approach is to analyze the strengths and weaknesses of the potential business partner. If their strengths and weaknesses do not overlap with the entrepreneur’s, then that is a strong relationship, as a partner’s aptitude should balance the skillsets of the founders.
Early hires are another foundational pillar for a budding company. When hiring employees to an early team, look for an alignment in morals, values and decision-making. Workers that challenge viewpoints and direction are counterproductive to the team and can inhibit progress at a crucial business stage. Another factor to consider is their ability to maintain their composure under stress. Launching a new company is not easy and requires significant amount of time, effort and dedication. It is critical to surround a young company with like-minded, success-seeking individuals with similar attitudes and ethics.
Every startup begins with a laser-like focus on raising capital to launch their company. While money is essential to grow a new business, obtaining large sums of financing can be the killing blow. A key aspect to handling the significant influx of cash is to spend it wisely and on facets that will directly grow the company. Too many startups receive their investments and begin to spend superfluously on marketing, hiring and other nonessential items. One way to prevent mishandling finances when hiring is to seek out employees that want a stake in the company over a large paycheck, as they are more likely to be dedicated to the success of the business.
The beginning stages of a startup are chaotic. There are many things that demand attention from the entrepreneur, but avoiding distractions from nonessential items is key to realizing success. With the sheer volume of countless decisions to make, an entrepreneur needs to remain focused on the product, audience and strategy. While it may need adjustments, it is important to keep on the original path. Be methodical and selective of which ideas are pursued, as wasting time on failing ideas is siphoning time from building the business.
While there can be a myriad of problems that arise when starting a business, building a strong core of support through sound hiring decisions, properly handling finances and maintaining focus can position a startup for long-term success. Launching a startup is quite complex and time consuming, and the more focused an entrepreneur is on core aspects of building the business, the more likely they are to reach success.
Mason Cole, founding partner of Cole Sadkin, LLC, focuses his practice on intellectual property. Whether you are looking to start a small entrepreneurial business or wanting to protect the next million-dollar idea, Mr. Cole specializes in guiding you from the initial incorporation or trademark to your exit strategy and every stage in between.