The DOs and DON'Ts of Starting Your Own Business

posted on 06-07-2019

One of the most valuable assets any startup can have in its portfolio is good advice from those who have successfully battled the same issues these entrepreneurs now face. 

In this article, six successful small business owners share their hard-earned wisdom with InvestingAnswers’ readers debating whether or not to take the entrepreneurial leap.

InvestingAnswers would like to thank the following small business owners for their gracious startup advice to our readers: Grant DiCianni, President of Tapestry Productions, Anthony Ronga, CEO of Intothedarkroom, Ken Kimmel, co-founder and President of ON THE SPOT SYSTEMS, Cole Harper, founder and CEO of SceneTap, Kevin Cho, co-founder of MidtownRow.com, and Aliya Jiwa, CEO of The Spunky Stork.

Startup Business Tips: On "The Idea"

DON'T get too hung up on "the idea." The idea is a necessary step, but it's ultimately going to define 1% of your success. The other 99% is how you execute on the idea. If you can't execute and execute well, the idea's not going to mean anything. 

DON'T worry about copy cats. If you're not paranoid about someone else beating you to the punch or stealing your idea, your idea probably isn't that good.

DON'T plan to sell to everyone. If you plan to sell to everyone, you will find it hard to sell to anyone. 

DO understand the power of the niche market.

DO be open to criticism. For every great idea, one person will love it, one will be indifferent, and one will think you're crazy. This is a good thing.

DO patent good ideas. If it's truly a new product or concept, figure out how to widen the moat with intellectual property, creating your own barriers to entry.

Startup Business Tips: On the Art of Good Business

DON'T choose just anyone to start your business with. If you have co-founders or partners, be brutally honest to yourself about whether you have the "right" team. It goes way beyond objective capabilities. You need to consider their values, motivations, and temperament. 

DON'T rely solely on textbook knowledge. Reading business startup books and articles is a great start, but textbook scenarios only work in textbooks and case studies are an exception. Take all literature with a grain of salt and learn by doing, by experiencing.

DON'T underestimate the power of research. Research your market. Research price points, research your competition. Then use your knowledge as a template.

DON'T forget to read the fine print. 

DO negotiate. From the checking account to Fed Ex shipping terms to the website design team, everything is a negotiation.

DO understand your vendors’ policies as well or better than they know them. Sometimes it’s the difference between a major success and a major failure. 

DO hire the best attorney and best accountant you can find. Whatever you're paying them is probably worth it and will save you money in the end.

DO use as much technology as you can to make your life easier. If it doesn’t, you don’t need it.

Startup Business Tips: On Creating the Right Attitude for a Successful Startup

DON'T take business performance personally. You cannot live day to day emotionally, based on how your business is doing. 

DON'T stress over things beyond your control. Nothing ever goes as planned.

#-ad_banner_2-#DON'T take business mistakes too hard. You will make lots of mistakes, but the smart ones truly learn from them and apply that knowledge to leverage better business practices.

DO consult those you trust for support. Surround yourself with people smarter than you and listen to them. 

DO always underestimate. Your capture rate will be less than 1% of your market/audience/drive-bys/visitors/walk-bys. If it's higher, then you're lucky!

DO listen to your gut. If you think you can't do it, then you probably won't.

DO remember: There’s no magic recipe for success.

[Want to break the daily grind and be your own boss? 5 Reasons Why You Should be Self-Employed

Startup Business Tips: On Money

DON'T expect to profit right off the bat. If you are self-funding your business, be prepared not to make any money for much longer than expected.

DON'T think that spending more equates to better quality. 

DON'T underestimate any costs. Be prepared to spend more money than expected. 

DO live and do business within your means. Smaller is better. The office with a view is nice, but a basement with no windows will have to do.

DO have a cash reserve. Raising capital, particularly early on, is the most critical thing to avoid early start-up failure.  Resources are scarce.

DO reflect. Running a business is not all about just money. Know what you have more of at any given moment; time, sanity, or money. Sometimes you need to spend a little more to save a lot of time and agony. Sometimes you need to spend a little time to get a better price. 

The Investing Answer: As a final piece of advice, Kevin Cho has this to say about the importance of creating the right team to start a good business: "Starting a business can be incredibly emotional and stressful, and there will be moments that bring out the worst in people. If you can live with that, then you probably have the right colleagues. If you're not sure, then ask yourself if you truly know your partners and if you're willing to take a leap of faith." 
 
[Hear more insightful advice from startup owners in 4 Tough Realities of Starting Your Own Business]
 
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