Mistakes will be made during the course of your entrepreneurial career. Most of them will be relatively harmless—they won’t ruin your company. However, there are a few catastrophes out there for which you should keep an eye out. These issues are avoidable, which is why it’s a shame to see companies go down because of them. If you want to become a successful business owner, it’s vital that you be sure to avoid these four pitfalls.
1. Intellectual Property Theft
Chances are you started your business because you have something no one else can offer. You have a brilliant new product or service you want to share with the world, and you want to make some money while you’re at it. In the interest of getting it out there, you decided to forgo patents and trademarking and go straight to production.
However, if you are successful, you will eventually find knock-offs of your product on the street. There are those who are always looking for any opportunity to make a quick buck. That includes taking advantage of entrepreneurs who were in a rush and neglected to protect themselves and their product.
If you think you can outrace them in terms of product development and production, you’re mistaken. While you have months, maybe even years, of product development to pay for; all they have to pay for is production. Even if your product is better, your competitors will be able to bring theirs to market at a lower price point.
Protect yourself. Make sure everyone involved in the project signs a non-disclosure agreement, from your newest employees to your biggest investors. Make sure the trademarks, patents, and copyrights are all in order before you go public.
2. Stealing Intellectual Property
As an entrepreneur, you’re often going to look for the least expensive options available, especially if you’re lacking in capital. It can be tempting to just steal something. Nothing big of course — just little things, like a sound effect to use in your marketing campaign or a small graphic. What’s the worst that could happen? A lot of bad things can happen. The moment you steal intellectual property, you expose your start-up to multiple threats, from customers losing faith in you and your company, to a lawsuit that can easily bankrupt your company. If it doesn’t drain the coffers, the lengthy trial process and bad publicity can (and often will) build up, burying your start-up and killing it before it gets off the ground.
You might end up stealing intellectual property unintentionally if you’re not careful. Research names before you choose one for the start-up. Use Google Reverse Image Search to make sure the images you’re using are either free to use or made from scratch.
3. Running Out of Money
You could have a great idea, a competent team, and a receptive market, but if you don’t have capital you’re going to have to close the doors for good. The good news is, there are things you can do to make sure you always have money to work with.
Keep a close eye on your cash flow at all times. If you have an accountant, talk to them regularly to make sure everything is in order. Run background checks on your clients to make sure they can afford your services. If it looks as though you’re going to have money problems, find more investors or secure a line of credit immediately. Don’t wait until you’re in trouble to start looking for a solution.
4. Losing Key Members of Your Team
You can’t do everything; that’s why you have employees and partners. Losing them at critical growth points can be a major set-back for your company. Fortunately, there are things you can do to prevent this problem.
The first thing you should do is make sure that everyone on the team is stable. Take measures to bolster company morale and make sure everyone is engaged and satisfied. You can also create redundancies, which will give you a back-up plan, a safety net to fall back on should you lose key employees.
Running out of capital, losing team members at critical points, and issues involving intellectual property are all avoidable business problems. It’s your responsibility as an entrepreneur to protect your business as well as possible. Keep an eye out for these problems and your company should thrive and grow.
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