The Top 10 Mistakes Entrepreneurs Make
by Rana DiOrio
As independent publishers, author-publishers, small-business owners, and/or vendors supporting the content-producing industry, we are all entrepreneurs.
I took on that role in 2009 by starting a children’s media company after I had spent years working in law, finance, and private equity. Throughout my career I have learned some of my most valuable lessons by making mistakes. Now I hope that sharing my lessons learned will benefit other IBPA members.
To broaden the scope of this Top 10 Mistakes list, I sent an email to more than 25 friends who are former clients, serial entrepreneurs, and/or early-stage investors. Before I hit Send on the email, I reflected on the group and the history I share with its other members. I smiled, thinking that at one time I had given some of them advice—in my capacity as an attorney, an investment banker, or an investor—about how to build their companies.
Now that I’m the entrepreneur, I enjoy a whole new appreciation of the journey entrepreneurs take to make their businesses successful. I shake my head remembering that neophyte who offered advice without ever having walked in the shoes of its recipients. I am older, wiser, and more humble these days. And I feel as though I can now share advice from the perspective of one who walks the talk.
Accordingly, here are the top 10 mistakes I see entrepreneurs making.
10. Thinking or acting like a small business. For example, printing cheap business cards, using what is plainly a home address as an office address, chasing investors around at entrepreneurs’ meetings. Think BIG. Then, be BIG.
9. Transmitting anything with errors in it. Nothing should leave the company unless it is perfect—no typos, no errors, no omissions. This goes for phone calls, emails, marketing materials, letters, invoices . . . everything. As one of my friends said, “Nothing screams ‘loser’ like getting a brochure with mistakes in it.”
8. Hiring ahead of your needs. Hire as few people as possible and pay the good ones more to do more. It is far better to pay someone 150 percent of what others in comparable jobs are making if that person willingly does the work of two people. Attract and retain people who are resourceful and hardworking, and reward them for that.
7. Losing people you need because of money issues. If a person is critical to the business, then pay that person appropriately. It hurts, but consider the alternative.
6. Not firing fast enough. Resolve hiring mistakes quickly and invest more time to make the right decisions in the first place with the next hires.
5. Being vain. Luxurious office space, expensive furniture and artwork, traveling first class—all those things cost money and add no value. Invest the money you could spend on luxuries and trappings in growing the business.
4. Letting fixed costs creep up. Keep your costs as variable as possible. Most businesses that do not require a large up-front investment can become profitable relatively soon, assuming that equity owners reduce or defer their compensation or make it variable with profitability.
3. Doing in-house what should be outsourced. Outsource just about everything that can be outsourced. This makes many costs largely variable and allows you to focus exclusively on doing what you should be doing.
2. Giving up equity. Equity in your business is precious, and you need to keep as much of it as you can.
1. Taking on too much. While it is alluring to want to conquer the world—taking on too much territory, too many titles, too many applications, and the like—it is best to remain focused on delivering one thing first, and excellently. Once you have proven the business model, then you can expand.
Thank you to my friends who helped me assemble this list. They asked to remain anonymous, but I am so very grateful to each of them not only for their insights but also for the experiences we have shared that make the list meaningful.
For more on the subject tackled here, I recommend APE: Author, Publisher, Entrepreneur by Guy Kawasaki, a serial entrepreneur, author-publisher, investor, and speaker.
Please share your experiences and insights. What pitfalls can you add to this list? I hope you will email firstname.lastname@example.org about them.
Rana DiOrio is the founder and Chief Executive Pickle of Little Pickle Press, a 21st-century publisher of award-winning children’s media. She is also a member of IBPA’s board and the board’s executive committee. To learn more: littlepicklepress.com; @ranadiorio; or Little Pickle Press @LPP_Media.