Friday, April 26, 2013

Young entrepreneurs share their early business goofs by Young Entrepreneur Council


What are some challenges you did not anticipate when deciding to start your own business?

Cash flow is a common struggle
"We started with clients from day one, so we've always been profitable, but one thing we didn't think about when we started was cash flow. Many profitable businesses experience famine and feast, due to invoice scheduling or higher sales during certain parts of the year. You must have a plan to spread profits from the most profitable times to cover times when cash flow is slower."
Allie Siarto | Partner, Director of Analytics,Loudpixel

How much is insurance?
"Did you think about all the startup costs—all of them? Failing to anticipate the high cost of insurance for certain personal and operational ventures can be a killer to capital, as some vendors and potential clients require a large amount of insurance coverage. Therefore, I urge entrepreneurs to analyze the potential cost prior to raising capital and [write] elaborate business models."

Everyone's a critic
"While our employees and many of our clients were excited about bringing a new brand to the community, there were many feathers ruffled. Through research, focus groups, and conversations, I was confident that the changes would be received well. I did not expect a note scribbled through my new logo with nasty feedback. Dealing with unexpected critics was emotionally draining but I stayed focused."
Nancy T. Nguyen | President & CEO, Sweet T Salon

My own extreme emotions
"I didn't realize how emotionally volatile running a startup would be when I first began. I'm usually wavering between intoxicating highs when I enjoy successes, to very deep depressing lows when things get tough. Your business becomes a reflection of yourself, and you can't help but take running it personally."
Eric Bahn | Founder, Beat The GMAT

Scaling takes time
"I'm a 'do it now' type of person, which means that I get pretty frustrated when I can't get going on something new. But scaling a bootstrapped business takes time. You've got to work on the right projects in the right order, and you can't just leap into the bit you want to be doing right away. That's been a tough lesson for me, and one I've had to relearn a couple of times."

What are my customers thinking?
"When you start a business, it's easy to assume you know exactly what people want to buy. But the truth is that understanding your customer and what they are looking for takes a lot of practice, and is a concerted effort that's going to improve your marketing and profitability like nothing else."

Support is a hot commodity
"I always assumed that starting your own business and going off on your own was seen as an honorable action. So I did not expect the lack of support I received from friends and family who told me I wasn't really a business owner. They said I wasn't making money yet, I was too young, I should take the safe route and continue working for someone else. They'd keep asking me how my job hunt was going."
Steven Le Vine | CEO/President, grapevine pr

You can't be everywhere at once
"When it comes to scaling the business, knowing that 'no one can do it like I can' did more harm than good. As the owner who is pulled in a hundred different directions, it is imperative to teach my unique way of working to others so that the business can grow with team support. Before teaching the team, I was frustrated, felt unsupported and could not escape the business for even a day."

A scheduled social life
"I've been told more than once that I'm not as fun as I used to be! When you have large goals, you have to carry a lot of weight on your shoulders. That can translate into a diminished social life, if you're not intentional about scheduling it. There is absolutely more time to be social, greater satisfaction, and success in the long term, but you will have to understand delayed gratification."

Constant industry changes
"My first business relied heavily on my network in the magazine journalism industry. That meant that when the industry started to contract, I needed to modify my client base and eventually start a second business to survive as an entrepreneur. Sometimes, industry changes completely outside your control can have a dramatic impact on your company."
Elizabeth Saunders | Founder & CEO, Real Life E®

There are too many options
"Leaving the large law firm to go out on my own, I was inundated with possible revenue streams to chase and spread myself too thin. However, once I picked a few narrow customer bases and focused my marketing efforts, I really started getting traction."
Peter Minton | Founder & President, Minton Law Group, P.C.

People aren't easy to manage
"One of the most challenging aspects of running a business is managing your employees. It is more difficult than I anticipated to keep a staff on track and make sure everything runs smoothly."
Josh Weiss | Founder and President, Bluegala

Many mistakes will happen
"While running someone else's company, I had the chance to see great ways of doing things and also learned methods that did not work well. For some reason, I thought this would virtually eliminate mistakes when I opened my own. It reduced the mistakes, but did not eradicate them. In business, you will make mistakes—you can only hope you catch them early enough to keep them from being fatal."
Vanessa Nornberg | President, Metal Mafia




The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, the YEC recently launched #StartupLab, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses via live video chats, an expert content library and email lessons.



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