The Five Biggest Mistakes Entrepreneurs Make

Ok, schooltime again, everyone take a seat and spit out your gum. Today’s lesson is from Jerry Kaplan (Google it), and a lecture he gave at Stanford listing the five biggest mistakes he’s seen others make.

The first of these is not having a clear enough mission - or idea of what constitutes success. I also liked his idea of working with people you dislike, as working with friends necessitates working with people who already think like you.

There won’t be a test, and we won’t ask you the other points - but we would like to know if you think he’s on the money.

Short, Simple and Sweet Business Plans

One of the most refreshing developments in the entrepreneur world is the emergence of the short business plan.

In the 80’s and 90’s it was all about the maxi plan - include everything that can possibly be calculated, and if you don’t the other guy will beat you. Our heads were filled with our SWAT analysis, and SCAN, and Strategic Plans and Mission Statements… as well as a swathe of facts and figures relating to our businesses. If you had it done for you it could cost up to $50,000. If you did it yourself, it could take months out of your life you’re not likely to get back.

A big business plan made the bank manager and investors more comfortable. The more detailed your plan, the more you had obviously thought about the venture you were about to undertake. The more possibilities and contingencies you had planned for, the more successful your new business was likely to be.

Well, in the 2000’s - as many people looked at their folders and spiral bound pages sitting on the shelf, unopened, people began to wonder if there wasn’t a better way. Something they could actually use. And so we started to see a whole bundle of short (sometimes super short) business plans.

It took Lifehacker to show many of us that it didn’t have to be this way, by drawing attention to  Wise Bread’s 4 point business plan. It is still big and messy. But it showed us that a smaller plan could still be useful. And perhaps more useful.

In How Come That Idiot’s Rich and I’m Not (which I can recommend, by the way - get it from Amazon), author Robert Shemen outlines the shortest of these I’ve found - an ultra light business plan that in 5 short stages. He says that he’s used it on every one of his successful businesses, and if it takes you more than an hour to do - you’re putting too much time into it.

These are the basic sections he thinks are important:

A Mission Statement

Robert thinks here you should put down your values, what you stand for. It is also a place for dream or vision, but importantly it is much more than about the money or ‘traditional’ success. Your values and vision will be the fuel that drives you forward - money and other things will follow.

An example:

“I want to make quality t-shirts, treat my customers well, and make an ethical profit.”

The Time Commitment

You might know where you want to go, but if you don’t get there straight away, you might quickly get disappointed. Therefore, he recommends that you write down the amount of time you will give it to succeed. Again, this will fuel you through many months of zero profit - perhaps many years. Don’t be surprised if it takes into your third year for a momentum to build - but things will start falling into your lap and you’ll be glad of the time you put to your dream.

Example:

“I’m, going to give myself 5 years to make this a success”.

Your Financial Goal

You should have some concrete financial goal - but just as importantly - a concrete method to get there.

Example:

“After three years I will be earning $60,000 through 1000 visitors a day to my online store”.

I’m pulling these numbers from the air, but you get the picture.

The Activities You Will Do

Everyone can have ideas - that’s the easy part. Translating it into and through the actual work, effort, and daily slog is where it gets tough. What will help here is a clear plan of what you will do.

Example:

“I’m going to come up with one new T-Shirt design a week. I’m going to get at least one new T-Shirt designer on my site per week. I’m going to spend a day a week publicizing my site, and selling at least twenty products per day.”

Your Schedule

This last part is so important, in the author’s view, that it is given even more detail here. A schedule can hardly be too detailed, in his mind. Robert says every ten minute block should be accounted for, but you might prefer hours or half days instead.

Example:

Personally I’d draw up a visual chart, but written it might look something like this:

One hour every evening, 11:00 - 6:00 Saturday, and 3:00 - 6:00 Friday.

For me, this way of thinking makes sense. I’d maybe juggle the order a little, putting my goal before my time commitment. And I’d flesh out the numbers if I was ever taking it to my bank manager. Also - you might want to have a good think to yourself about your plan first- for instance, in the example above, “Homemade t-shirts” are a competitive and saturated market online. But all in all, I can see myself using this much more than any other type of strategic thinking.

What essentials do you think you need in a business plan? And how lite is too lite?

Making Money From Your Art

Many of us have a skill, art, talent or dream we know is lying dormant, ready to let rip if the opportunity arises. Perhaps you are a keen musician, have a novel rattling around in your head (or at least the love of coffee and the sense that you could have been a French bohemian in another life).

Perhaps you are a good, but not professional, sportsperson, artist, or have a great craft bent waiting to erupt. Whatever it is - - there is a way to make a living from your art - - and it might be less impossible than it may seem.

Legendary wealth author Robert Kiyosaki says that - - for all the get rich quickly (or get rich slowly) methods out there - - nothing beats capitalizing on a talent you may already have. For instance, Michael Jordan was much better off capitalizing on his childhood skills on the basketball court than being yet another wannabe on the real estate market. It’s better that Bob Dylan indulged his love of playing music, rather than merely starting a music magazine (although he does have his own radio show these days).

Capitalizing on a skill or interest is such a great wealth strategy because it fulfills some of the key requirements of effective entrepreneurial activity:

• Identifying an untapped niche is one of the key acts in starting a successful venture. Your creativity is necessarily your own. Using it is a great way to find something that no-one else can offer.

• Most businesses take years to turn a profit - - sometimes as many as 7 years, in the most competitive industries. Utilizing an existing talent or skill, you can draw upon years development you might have taken place  - - perhaps going back to childhood. Instead of learning a new skill, such as web design or share trading, adding implementation skills to the one you already have gives you an instant advantage.

• Using an existing talent gives you one key asset - - authenticity. The used car salesman who would rather be a ballet star isn’t going to sell many cars. Conversely, Donald Trump is Donald Trump - he doesn’t have to pretend to be any differently in the boardroom. Go with your god-given talents and abilities to really do your best.

• Successful entrepreneurs combine talent and skill with that most elusive commodity - passion. They live and breathe their industry, 24 hours a day. If your business is your talent or dream, getting the ‘passion’ part should be easy. And it will be difficult to find someone who knows about your particular area of interest as yourself - suddenly you are an instant expert.

So, if you have a skill that has never really flown as a full time career move, consider these tips to making money from your art or talents:

• Often we think too small. For instance, we might try to make enough money from our hobby to get by. But self employment is a tough business, and there are rich and lean periods you will need to cater for. Instead of calculating the amount of money you need to cover an average week or year - double it. That way, you will factor in the considerable time you won’t be working - a real possibility in the early years.

• If you have lost passion for your talent lately, think of the fundamentals required to keep it strong. Are you surrounded by like minded people? Do you dream, and have a clear idea of where you’d like to be? Do you have a routine, so that your interest isn’t pushed into “free time” that never comes? Also consider you might need to move out of your comfort zone. Scare or frighten yourself by moving city, or taking more risks than you otherwise would - so that you feel your heart pumping again when you act.

• Think of your talent as a business - - or if you really want to give it a boost - - as a get-rich-quick scheme. We all know the talent industries take a lot of time, but apply the same money-orientated thinking as you would with any other scheme will shake your dream into reality. For instance, how good is your online presence? Is it easy for people to turn an interest into a following, and eventually, a purchase?

• Other get-rich-quick thinking that might be useful is networking - - do enough people - - and the right people - - know what you do? Consider outsourcing - - if selling isn’t your strong point, find someone whose it is. Perhaps selling your products online will be less threatening than dealing with people face to face. Or if you have no connections besides your peers - consider ‘brokering’ or representing each other. Sometimes it is easier to wax lyrical about someone else’s work and they for you.

• And if you merely gave your talent as much time as your ordinary day job, imagine how far progressed your dream will be. Many writers swear by clocking on at 9am and clocking off only once they have filled a full day’s work. You might also need to be as disciplined with other ‘days’ in your self employment schedule - - marketing yourself, finishing up half completed projects, and dealing with your finances.

Think of your passion as not a “one day, maybe after the money is sorted” activity - - but potentially the greatest advantage you have in your quest for wealth.

Read more about Op Art on OpArt.net.