I’ve founded a lot of different businesses over the years and there is one thing for sure, running a start-up is very different to running an established business. So what’s a few key things that I’ve learned?
The biggest mistake that many entrepreneurs make is they believe their cashflows and assume that success is only moments away. A cashflow is the result of modelling the business in Excel and often bears little resemblance to reality. There are a lot of assumptions that you are able to identify that are built into any cashflow and then there are a lot of other assumptions that never make it to your analysis because you never thought of them.
For example, today I was looking at a cashflow for a new business unit I’m working on and one of the major assumptions is the price of the new offering. When I put the cashflow projection together I really thought about the pricing and made sure that it at least looked sensible. Despite this, now that we are market testing the service I’m going to be looking at what real customers tell me more than my guestimates.
Many entrepreneurs also make the mistake of trying to make the perfect product/service prior to taking it to market. Don’t do this! You could end up spending a huge amount of time and money on something that no one will actually pay for....