7 Costly Startup Traps Entrepreneurs Should Avoid

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There is no shortage of people with great ideas. There is, however, a massive shortage of people able to execute big ideas.

The gap between the creation and execution of ideas is often not the fault of the people who have the ideas, most of whom work full time, perhaps raising a family and have limited resources and skills to to start. More often than not, the potential entrepreneur simply has no experience with starting a business.

In the past, aspiring entrepreneurs either turned to a mentor for help or left on their own and learned as they went. These days, however, you can read starter books and find a number of tutorials online. With this increase in available resources, however, have come the inevitable business opportunists who are waiting to profit (and money) from inexperienced entrepreneurs.

If you are new to entrepreneurship, be careful when asking for help in the following areas.

1. Co-founders

Many businesses are founded by more than one person, often to fulfill the necessary skills, resources and responsibilities. If you are looking for co-founders for your business, keep in mind that everyone you meet should have the same expectations as you do to start.

Related: How To Survive The Storms Of A Startup

For example, because you most likely have a bootstrap startup, you should be wary of any co-founder who has higher expectations, such as a regular salary, expense reimbursements, commissions, office, etc. A true co-founder will understand that to get a business off the ground requires sacrifice and grain.

You should make as much effort to find and verify a co-founder as you would for a spouse. You will be just as financially and emotionally connected to that person or people, so give the process the energy and time it takes to sort through.

2. Technical talent

Everyone seems to have an idea for an app, a website, or some other new technology. LikendisLikes often try to find technological talent in the hope of attracting someone to do the deferred payment or equity work in the business. The problem is that too many developers have been burnt out in these offerings, and most tech talent understands that the chances of success for most startups are extremely slim, so it’s getting harder and harder to find someone in these circumstances.

If you need good tech talent, be prepared to pay the price, at least at the initial stage. Keep in mind, however, that you do not need (or should) develop a fully fledged working model of your product or service. Instead, develop a minimal viable product (MVP), which provides the most basic benefit of your idea. Once you’ve tested it, developed the proof of concept and the traction on the market, you can then move on to the next stages of development.

3. Service providers

As with tech talent, service providers, such as accountants, lawyers, distributors, printers, etc., would all love the opportunity to work with the next multi-million dollar company, but no one wants to start. free. Most importantly, if you have service providers willing to cut costs for your start-up, the level of service you receive is often indicative of what you are willing to pay.

The most important services to pay for are those for which you have the least experience and understanding. If you don’t understand anything, click on these books, subscribe to tutorials or find a very talented co-founder. In addition, it is always beneficial to have good legal advice, someone who can provide you with the right business (especially with the co-founders) and the necessary expertise in specific areas, such as property protection. intellectual. As with any business partner or supplier, always do your homework and check references.

4. Editors and bloggers

When I worked in the toy industry, there was no shortage of bloggers who wanted to review our products. Most wanted two or three free samples and substantial fees to advertise on their websites. If you pay someone to review and discuss your product with their audience, it is no longer a criticism – it is an advertisement. The most honest reviews we have received have come from people who actually bought our product, reviewed it, and then sent us a link.

This is not to say that you should not take advantage of these resources as part of your marketing strategy. Sometimes bloggers have a huge and influential audience and can help quickly increase the visibility of your product. Add a discount code for consumers to buy through your website and you will most likely see a nice increase in sales. Before associating with any of these resources, do your homework and make sure the reviewer has a good reputation and an audience that is part of your target market.

Related: 6 words from entrepreneurs who will take their businesses to the top

5. Product and industry awards

Most industries offer a wide variety of rewards. LikendisLikes should understand that there are usually fees to consider for a prize and use copyrighted logos or images to promote the prize, which can sometimes run into the thousands of dollars. In many cases, I have seen that paid commercial quotes rarely go without gaining something – we’ve already submitted a product for a toy price that apparently had a category for each quote.

Again, knowing which stock exchanges have the most influence and positive impact requires careful and thoughtful research. While it’s nice to have award-winning logos all over your website and products, it can be quite expensive and, if done in a hurry, can cause more harm than good.

6. Incubators

Incubators of small businesses, or organizations which help the entrepreneurs to take ideas of generation in creation, multiply everywhere in the world. Most provide incredible resources for aspiring entrepreneurs, but all have varying degrees of entrepreneurial involvement and resources available. Most importantly, most incubators are not free. Some require upfront fees or have deferred pay scales as the business grows, while others require a share of your business equity.

If you are considering a business incubator, do extensive research on your target organizations online and in person. Contact the administration to clarify the conditions of participation. Review the list of mentors and make sure they offer the expertise and network you need for your startup. Understand the commitment you are asked to make, which can range from occasional involvement to a full-time presence on site for several months.

7. Investors

Perhaps the most daunting step for an inexperienced entrepreneur is to try to raise funds. Because finding the right investment partners can be difficult, there is no shortage of people and businesses promoting their ability to find them for you. The problem with most is that they need a warrant to do it, often thousands of dollars and with no guarantee of success.

Investment firms (venture capital and private equity) and individual investors (angels) do not ask you to pay fees to be considered for the investment. If they do, stay away. The best (and probably the only) way to find good investors is to put time and effort into yourself. Attend networking events and play an active role in local and regional business organizations. Also make sure that you understand the expectations of investors, because often you only make one impression to make a first impression, so you have to make it count.

The common theme in all of these warning tips is “do your homework”. Take advantage of online reviews, resources, and references to your advantage and be wary of anyone or business who is looking for your attention and your money and who has virtually none of this. Most importantly, network with other entrepreneurs and be active and visible where they meet, such as coworking places and networking events. Start-up entrepreneurs love to help each other – and these are the most reliable and affordable resources you’ll find.

Related: 6 Common Mistakes New Business Owners Should Avoid

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