I saw them all, the wannabepreneurs who started up a flashy business and failed faster than they got there business on the rails. In this article I will share 5 absolute “no-no’s” when you want to build a successful and sustainable venture. 
- BORROW MONEY EARLY AND AS MUCH YOU CAN GET. If you find a bank or investor who believes in your story, perhaps you can get a loan….but don’t forget that loans have due dates and that installments have to be paid. Installments on fixed dates versus impracticable and unreliable cash flow of a startup? Not a good idea!
- HIRE AS MANY PEOPLE AS QUICKLY AS YOU CAN. People on the payroll means overheads: an overhead has to be paid every month again even in those months sales could be better. Overheads eat your cash faster than you can bring money in. When you start, work with flexible formulas; hire people when you need a specific job to be done. Much better for your cash position and your sleep at night!
- FOCUS ON A BUSINESS PLAN. Of course you need a business plan. A workable business plan that serves as your compass on the rough startup seas. But don’t focus on that MBA-style business plan. Rather focus on a ‘funding ready’ business plan that can be used as basis for a (second) funding round. Planning is important for any business but sales are too!
- GET A MANAGEMENT TEAM IN PLACE. Some entrepreneurs think that you need a complete management team in place from day 1: COO, CTO, CMO, CIO,….. It’s ok if these people are in your founding team and are taking the risks with you and have paid their share in the capital of the company. Otherwise, it’s suicide. A lot of “C’s” means overhead: salaries, expenses, cars,…. Not the best way to convince your banker nor your early investor.
- IT’S ALL ABOUT PERCEPTION. The startup money will be used to create fantastic offices in a pure Google, Microsoft or Facebook style. Expensive location, designer furniture and the necessary ping pong tables and video games. You don’t hear me say that a startup can’t have fun at work but before the fun there is a job that has to be done: customers, sales and revenue! Once that is done, enjoy the video games.
(c) Raf Vlummens 2016 – first published on https://EntrepU.wordpress.com