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Learn From Other’s Mistakes: 3 Practical Ways to Avoid Startup Failure – Part 3

In the final post of our series, “learning from others’ mistakes,” we discuss the importance of flexibility.
Set Goals, Not Expectations
 

If you’re running a startup, you’ve likely got big plans for your business.  In fact, we recommend that you develop a formal business plan that details how you would like to see your business develop in the next year, five years, etc.  Contained within that business plan are your goals for your business.  While we all hope our endeavors are successful, expecting them to be only sets us up to be disappointed.  That’s why it’s important to acknowledge the difference between goals (which are good) and expectations (which can be destructive).  Goals might be met, or you might fall short.  Not meeting expectations, though, can lead to disappointment.  Such disappointment often breeds poor judgment when making business decisions.

Don’t Quit…Adapt
 
Truthfully, the odds are high that you will fall short of your business goals.  Maybe it’s because the market isn’t as strong as you’d hoped or your launch was mistimed.  Maybe the product you’ve developed has flaws that need to be sorted.  Perhaps people on your core team are underperforming.  Or maybe your initial goals were unrealistic.  Whatever the reason, the key to successfully managing these shortcomings or unpredictabilities is flexibility.  Something that successful business owners recognize is that plans change.  Your willingness and ability to adapt to new circumstances and demands is a determining factor in the success of your business.
This post is not intended to be legal or tax advice.  Formeller & Formeller LLP’s Chicago startup attorneys have helped numerous clients form and operate their businesses.  Our skilled Chicago attorneys can help counsel you with employment issues and assist you with establishing proper employment hiring and employee management procedures.
Please contact our law firm today for a free legal consultation if you would like to discuss forming a startup or existing business operational issues.
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Learn From Other’s Mistakes: 3 Practical Ways to Avoid Startup Failure – Part 2

In the first post of our current series, “learning from other’s mistakes,” we examined the first of 3 common mistakes that successful entrepreneurs avoid when starting up their businesses.  Next, we focus on choosing your core team wisely.

Don’t found your business with the wrong people.  

One of the first decisions you will make when starting a business is whether you will be doing it on your own or founding with partners.    If you pursue the latter route and decide to include additional founders, choose wisely.  Be cautious and deliberate when selecting your business partners.  The decision should be based on a variety of factors.  Being friends with each other or finding one another easy to work with should not be the only reasons you’re partnering with each other (though getting along with your partners is crucial to the success of your business).  Instead, ask yourself what each partner has to offer the business.  Assess your own skills.  What can you bring to the table: the idea?  The implementation of the idea? The business know-how? Access to a group of vital investors or business channels?  While you’re at it, assess your weaknesses.  If you know where you’ll need assistance in order to get your business running successfully, you can often narrow your pool of potential founding partners.  Working with those whose skills and assets complement yours will achieve a well-rounded team.

Surround yourself with the right teammates after founding the business.

Once your business has been founded and begins operating, thinking that you (and your founding partners) can do it all yourselves is a very common, but misguided operational approach.  Not only does that type of attitude lead to burnout, but it can actually hinder your success.  We touched on this thought in our last post: the idea of trying to save money by performing certain tasks or business functions on your own.  However, these tasks or functions are often important to the success of your business and should be done properly.

There are a lot of components to running a business.  A few examples are bookkeeping, technology set-up and maintenance, legal needs and risk management, intellectual property, human resources, and sales.  Surrounding yourself with the right team to execute these (and other) components not only makes your life easier, but it ensures that things are done properly.  We continue to stress that it is always better to have something done right – from the beginning and at a reasonable cost – than to have to bring someone in to clean up a mess (usually at a higher cost).

This post is not intended to be legal or tax advice.  Formeller & Formeller LLP’s Chicago startup attorneys have helped numerous clients form and operate their businesses.  Our skilled Chicago attorneys can help counsel you with employment issues and assist you with establishing proper employment hiring and employee management procedures.  Please contact our law firm today for a free legal consultation if you would like to discuss forming a startup or existing business operational issues.

Click here to visit the Formeller & Formeller LLP website.

Learn from Others’ Mistakes: 3 Practical Ways to Avoid Startup Failure – Part 1

More than half of first-time entrepreneurs fail in their first business venture, a portion of those failures are due to legal pitfalls and unnecessary exposure to litigation.  In this series, we examine 3 common mistakes that successful entrepreneurs avoid when starting up their businesses.  This week, we focus on spending money.

Spend money early on to save money in the long run.  

Most successful entrepreneurs will stress the importance of allocating startup funds carefully in the beginning because every cent counts.  Operating on a lean budget can really help a business owner in a pinch, but it can also hurt a business in the long run.  While it may seem sensible to stash your cash instead of hiring an outside expert or company to perform certain tasks or accomplish certain goals, the fact of the matter is that those experts and companies exist for a reason.  You likely can’t perform that task or accomplish that goal by yourself.

Our firm often assists entrepreneurs and business owners who have elected to try and save money by negotiating deals on their own, using a template agreement or implementing a “handshake deal.”  As a result, they pay significantly more after the fact to have our firm renegotiate a bad deal or review deficient contracts, or even litigate issues in court.  Had they hired corporate counsel at the outset to properly draft their agreements or negotiate the best possible deal, they would have saved money in both legal fees and lost profits, and could have avoided court altogether.

This advice isn’t unique to legal needs.  It applies to experts in other industries, such as tech developers, accountants, and marketing teams.  It is always better to have something done right from the beginning at a reasonable cost than to have to bring someone in to clean up a mess at a higher cost.

Bottom line: you’ve got to spend money to save money.

Next week, we will examine the second way to avoid startup failure: choosing your core team wisely.

This post is not intended to be legal or tax advice.  Formeller & Formeller LLP’s Chicago startup attorneys have helped numerous clients form and operate their businesses.  Our skilled Chicago attorneys can help counsel you with employment issues and assist you with establishing proper employment hiring and employee management procedures.  Please contact our law firm today for a free legal consultation if you would like to discuss forming a startup or existing business operational issues.

Click here to visit the Formeller & Formeller LLP website.

Disclaimer

The purpose of this blog is to deliver news and information that are relevant to our areas of practice. The news and information reported on this blog represent the legal actions of attorneys throughout the United States. Our firm does not claim to represent plaintiffs or defendants in all of the lawsuits, settlements, and jury verdicts reported, only those noted as Formeller & Formeller LLP cases. This blog is not intended to be legal advice. Before considering legal action in a business matter, you should seek counsel from an attorney.