It is said that we learn more from our mistakes than our successes, and while that may be true, it is nevertheless painful. It can be especially painful for entrepreneurs, for whom mistakes can potentially have far more impact, especially if they are working with others. Unfortunately, there is as of yet no way to entirely avoid the occasional hiccup, but learning from the past failures of others can be instuctive in avoiding similar blunders.
Mistakes in planning can be the most harmful, as it is crucial to get your business off on the right foot if you want to succeed. Early stage mistakes can serve to torpedo your company before it event gets off the ground, and too many entrepreneurs are unaware of how much they don’t know. Business formation seems like something that can wait when you’re just starting out, but not having a business entity can put your personal assets at risk. Even if you’re still working out of your home and don’t yet have anything to try and sell or market, having the protection of a business entity wll help you rest easier.
Having a business entity will also prove useful if you have a partner or co-founder you’re working with. The most successful partnerships aren’t just the ones that prove most fruitful in terms of output; they are the ones who have planned ahead in case of an eventual split. It’s easy for co-founders to make the mistake of thinking their partnership will stand the test of time, but few ever see the divorce from the outset. Having a co-founder agreement that provides for such an eventuality and questions of equity, as well as assigning your intellectual property rights to the business rather than individuals, will provide for your company’s future regardless of how the parthership unfolds.
One of the most common mistakes made by entrepreneurs is thinking intellectual property (IP) is something that doesn’t relate to them or their business, and therefore devoting no time or energy into the matter. While some businesses may be more IP-heavy than others, all businesses have IP. Not spending time figuring out what that IP is and formulating a plan on how to protect and use it can be a potentially fatal error for a business should someone else come along and decide to try and exploit it. Being aware of the value and importance of IP should be a high priority for you and any employee or contractor you work with.
When it comes to employees and contractors, don’t make the mistake of hiring without the right employment agrements in place. You don’t automatically own the work they create for you, and you can’t assume that they understand and will respect the importance of protecting your trademarks, patents or trade secrets once they move on from your employ. Create solid agreements that employees and contractors sign on day one to make sure thay your business is secure no matter who walks out the door.
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