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Many entrepreneurs make three crucial mistakes early on. They don’t pay enough attention to customer preferences; They ignore the competition because their product excites them, and thirdly, they forget to follow your business strategy. In fact, some have no strategy. They typically make these three mistakes because they succumb to pressure to get a quick return on borrowed funds.

In the January 2014 issue of Harvard Business Review (HBR) Roger Martin identifies rules to prevent common mistakes when developing a strategy. He states in this article, The big lie of strategic planning, that the first rule is “keep the strategy statement simple”. Rather than one long, often vague document, the company or entrepreneur’s strategy should summarize the chosen target customers and value proposition on one page.

Developing the strategy takes time and thought, so the owner must be patient and learn to filter out the many unsolicited voices that tell him how he can make money quickly. I can’t say enough how crucial it is to develop a simple strategy for startup. This simple strategy will be the guide in carrying out the owner’s mission or purpose for doing business.

Harvard professor and author Michael Porter says the strategy must be unique. He goes on to mention that strategy:

  • by consensus it is a bad strategy
  • is not engaged; is clarity
  • it’s about options
  • you need a set of uniqueness to help you differentiate yourself from the competition

Porter adds that less than 25% of companies have a clear strategy.

The strategy does not have to be embedded in many pages, it can and should be plain and simple.

In his 1985 book, Innovation and entrepreneurship, the late management guru Peter Drucker (1909-2005) said that entrepreneurs create something new, something different, and have unique characteristics. He said McDonald’s exemplifies entrepreneurship; “They didn’t invent anything. No decent American restaurant hadn’t produced hamburgers for years.” Drucker continued, McDonald’s asked:


What is customer value? Then they standardized the product, designed processes and tools, dramatically improved yields, and created a new market and a new customer.

Drucker said McDonald’s carried out the entrepreneurial spirit. Whether the entrepreneur is a large existing institution or an individual starting his business on his own, the same entrepreneurship principles apply. “The rules are more or less the same, the things that work and the things that don’t are more or less the same, as are the types of innovation and where to look for them.”

The startup owner often doesn’t spend enough time figuring out the customer value of their product or service. You also don’t spend adequate time developing and testing your strategy. Instead, she focuses on making a quick buck. That is why it is essential that the owner do the following:

  1. Take time to understand who the customers are
  2. Identify needs and wants, real and perceived, and target markets.
  3. Decide how to meet those needs consistently and to a high standard
  4. Be patient and focus on the long term. Research shows that family businesses are more successful than non-family businesses because the former have a long-term vision when making decisions.

Other things that owners are doing wrong include:

  • Listening to too many people with differing opinions about the business.
  • Trying to “save” money by not obtaining the necessary resources to consistently produce high-quality goods and services.
  • Not taking enough time to raise adequate funds in the “proper” way. They often borrow from family and friends without clearly stating the risks involved and the repayment terms.

Starting a business is risky but rewarding and requires patience and courage. However, following the tips above will significantly increase the likelihood of success.

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