Tuesday, August 7, 2012

Free Falling- Mistakes Young Entrepreneurs Make

I believe in taking chances. I think everyone, at some point in their life, should throw caution to the wind and see where it takes them. I also believe that in order to take these chances you have to be somewhat calculated. After all, you would never see a sea captain just sail without the proper instruments. Therefore, you should never just take a leap of faith without having some idea of what lies below- especially if you are an entrepreneur.

There are many great things about being an entrepreneur. You are not only free to be able to do what you want to, but it gives you the ability to succeed in a way that many may think is impossible. But the downfall of an entrepreneur is that you are responsible for yourself financially. This means that too many mistakes and you may easily find yourself sleeping on someone's couch or a cold piece of cardboard.

The number one mistake young entrepreneurs make is not creating a good financial plan when deciding to go solo. Instead of them making a proper assesment of their finances and then understanding the restrictions and boundaries of their newfound career they just decide to jump in the deep end- whether they can swim or not. Inevitably, some will drown.

So how do you stay alive?

First, make sure you can really support yourself as being an entrepreneur. Just because you have a good idea or service it doesn't mean that you will make money the first day. In fact, you probably won't there are a million of great ideas; execution is the thing that decides whether it is profitable or not. And often times, proper execution takes money. That is why you should never quit your day job until your business starts to show growth. Yes, I know you consider your job a mundane waste of your talents and yes, we all know you are smarter than your boss- but your confidence doesn't pay the bills. Therefore, before you quit your day job you should be 100% that you will be able to make it on your own. If you do decide to take the big jump at least make sure you have a money parachute-which brings me to the next point.

Just because you have a parachute doesn't mean that you won't eventually hit the ground so while you are gliding on your entrepreneurial high, don't forget eventually you may eventually run out of money. If you are smart it will be a soft landing with a few bumps if any at all. If you are not, prepare for a few bruised egos and broken self-confidence. Many young entrepreneurs have a tendency to overspend. It is not surprising they are caught up in the moment, they really beleive in their idea and therefore, they put all of their heart, effort and money into the business. However, as we all know, the things we love can sometimes be the biggest disappointment. As a result, you must make a proper assesment of your finances and stay within the guidelines set. So yes, you will miss a lot of parties, nights out and fabulous vacations- but hey success comes with sacrifice.

The last mistake many young entrepreneurs make is only doing one thing. I applaud those entrepreneurs who have found their niche and only do one thing. However, it probably took them years to get to that point. Now, I am not suggesting, that you spread your energies thin and just take any random opportunity that comes your way. But there is nothing wrong with using your talents in ways complimentary to your ultimate goal. So yes, you want to be the next Bill Gates, but I am sure he was also helping people solve software issues, while he was creating his own software. Never tell yourself that you can only do one job. Being an entrepreneur is about finding creative ways to utilize your talents-who knows you may even find something that is a better fit for you.

If a young entrepreneur can remember these three points, it won't guarantee sucess, but it will definitely get you further than ignoring them would

Until Next Time.