Entrepreneurial Pitfalls

February 2010

Today’s volatile economy has even the most adept workers questioning their stability. Whether you’re unemployed, tired of meeting every new recruit, or merely looking to mix things up, entrepreneurship provides a legitimate and exciting alternative. Launching your own business comes with lots of great perks, but be sure to look before you leap. Karin Abarbanel and Bruce Freeman urge you to avoid these 8 potential pitfalls when starting out.

Pitfall #1: Spending Money for the Wrong Reasons
Of all the traps you can fall into, being overly concerned about your business image is probably the biggest. It can lead you to rent office space you can’t afford, buy costly equipment, or hire professional people to do jobs you can take care of. Think very conservatively in the early stages. Anything you, or your friends or family can help you do yourself, do it.

Pitfall #2: Not Getting the Right Help
To get your venture off the ground and sustain it through thick and thin, you need smart people you can rely on, whether you have a simple question or a looming crisis. Finding a good attorney should be one of your first moves. And don’t forget vendors. Maintaining good relationships with vendors can help you launch successfully. Plus, they can be a great source of client referrals.

Pitfall #3: Not Pricing Properly
Women tend to undervalue their talent when it comes to pricing and negotiating. Fall into this trap and you can find it hard to dig your way out. Knowing how to price your product and service fairly and accurately so you can operate profitably is a survival skill that every small-business owner needs to acquire.

Pitfall #4: Not Valuing Your Time
There’s a flip side to thinking you have to do everything yourself. At some point you need to start putting a value on your time. When you analyze your day, do you find you’re spending 80 percent of your time doing routine tasks? By training the right person to take them over, you can focus 80 percent of your time on building client relationships and long-range planning.

Pitfall #5: Not Thinking Enough about the Big Picture
It’s easy to lose your way when your mind is mired in the details of what needs to get done right now. That’s why it’s important to step back periodically and look at the big picture. You need to create a road map to keep your business headed in the right direction. Staying focused on the big picture will give you the fuel you need to take risks and step out of your comfort zone.

Pitfall #6: Not Understanding How to Network
Many people don’t understand that networking is a mutually beneficial tool. When you meet someone, decide how you can help each other out—figure out how you can connect your networking partner to someone else in your circle. That way you’ll be building a chain of contacts that you can call on when you need support or advice.

Pitfall #7: Not Trusting Your Gut
When making certain major business decisions, you may need some experienced guidance from outsiders. But remember, no expert you hire is ever going to have the emotional or financial stake in your business that you do. So don’t disempower yourself. In the end, you are the single best judge of what your business has to offer and how it should be run, so listen to their advice but trust your gut and heart.

Pitfall #8: Spending Too Much on Advertising
Many entrepreneurs warn against spending too much of your budget on advertising. Before you pay an outsider to do the work for you, consider taking some classes at your local community college or an inexpensive seminar that focuses on marketing strategies for small businesses. The key is to find creative ways to get the word out, while at the same time ensuring that your target market is listening.

Reprinted with permission from Birthing the Elephant: The Woman’s Go-For-It! Guide to Overcoming the Big Challenges of Launching a Business. Copyright 2008 by Karin Abarbanel and Bruce Freeman, Ten Speed Press, Berkeley, CA  www.tenspeed.com.