In my more than 20 years as a serial entrepreneur and investor, I have seen a few common mistakes among startups and entrepreneurs. Here are some tips to fix those mistakes:
1. Know What You Don’t Know
When I visited New Zealand, I found that majority of their small and medium-sized enterprises had no board advisors at all. This is the problem of most startups: they don’t know what they don’t know. Most startups feel that asking for help is a sign of weakness.
My advice is to have board advisors (comprised of people from different industries with diverse backgrounds) whom you can engage a couple of hours per week. Likewise, attend quarterly board advisory meetings where you present and account for your accomplishments, plans and goals. Having a board of advisors can help you learn the questions you do not know.
2. Keep People Informed
Start monthly newsletters.
The first newsletter should have about eight sentences. Send the newsletter to your board advisors, as well as to existing and potential investors. The goal is to keep them informed of events and challenges in your startup. When you need capital investments, these investors will be ready to commit funds since they know and understand how you are running the business.
The second newsletter should be equally as short as the first. Send it to your distributors, suppliers, partners, executives, fans and customers.
3. Budget Your Operations
Work closely with an accountant, and try to have a budget for your next month operation or next year. You will best understand your business expectations.
4. Build Your Strategy
Focus on your strategy, and stick with it. Though you may change your plans, just realize that you can only do so much. Focusing on your strategy will be your biggest challenge, but it should also be fun.
5. Identify Your Competitor
A competitor is a good sign of a robust market. Identify direct and indirect competitors. The competition will tell people where your company stands and what sets you apart.
6. Focus on the Why
Identify what drives people to buy your product or use your service. Focusing on the ‘why’ can motivate you to accomplish things you have never done before and help you pursue your goals.
7. Look Ahead
Entrepreneurs seeking capital for their businesses should look forward to exciting new developments in the coming years. New laws will open up more opportunities and new ways to secure financing and get funding
8. Take Advantage of New Technologies
Social media and internet technology are instrumental to all new ways of financing. You might find a new market or niche altogether.
9. Write a New Business Plan
Writing a new business plan with an executive summary will help you focus and stick to it. Prepare a concise, two-page executive summary.
The world’s largest pension fund ADIA showed me that executive summaries have two pages, maximum, with up to six addenda. It should contain: name of company, state of incorporation, year incorporated, shares outstanding, compensation offered for capital, industry sector, executive names, geographical area and address.
Include the full bio of your executive team in the addenda because investors are always looking for a team. The first sentence of the first page should explain exactly what your firm does. I pass on too many deals many times when I cannot figure out what the firm does in one sentence or one paragraph.
10. Plan and Practice Your Pitch
Practice your presentations in front of a mirror. People love to get instant feedback from everybody in the room. Initially, do this with friends and people you know. Practice makes perfect.
These are just little things startups often miss. If left undone, these can be their biggest mistakes.