Five Mistakes Made by Startups

During my 40 years in business, working as a small business advisor, I’ve learned that it’s better to learn from other people’s mistakes than your own. That’s why I’ve put together a list of some of the most common errors I’ve seen over the years.

I’ve borrowed the cash I need to start from my best mate.

I know what you’re thinking; it can’t go wrong!

WRONG – He’ll call you every day, he’ll start telling you what to do, he’ll want his cash back for something else; whatever happens this is the surest way to say bye-bye to your best buddy.

If your business is that good – borrow the money from a bank or try one of the government backed schemes (you’ll need to Google “business loans” to find them) not family or friends, it’s the quickest way to lose even the best friend.

Jumping the gun

You’ve just invented, the “next best thing.” It can’t fail and everyone loves the idea. So you go out and raise the cash and get going straight away before someone else steals the idea.

WRONG – Just listen to my little tale of woe:

A friend of mine had a fabulous idea. She invented a flag which she thought she would sell to undertakers to give to people driving in funeral processions. She bought thousands of black flags and that’s when her problems started. She’d paid too much, made no profit, the flags fell to pieces as you drove along and… the Funeral Directors hated them.

Take your time, research the market and think about why no-one else has done it before. It’s probably because it’s not a very good idea. Better still, talk to me or someone like me, trained to ask the right questions.

You don’t need a limited company

All you want to do is to clean windows for a living; it’s simple, effective honest work. You’ll keep the proper books so  you won’t need to get into complicated company stuff.

WRONG – Your first job is doing the windows of the local BMW showroom. You deal with the front windows with no problem, it’s a breeze. The back of the site is more difficult; all of the new cars are stored there and it’s difficult to get to the top windows. You manage it but the bottom of the ladder slips. You fall on to a brand new 7 series, you bounce off and then roll down the hill, bucket and squeegee in hand, breaking windscreens, denting roofs and so on. The damage comes to £65,000 and you, my friend, will have to pay it all.

If you had a limited company you would not have had to pay anything even though it was your stupid mistake. Oh, and don’t be fooled – public liability insurance doesn’t always pay out!

Business plans are for banks

You really don’t have any need for a business plan and you certainly don’t have the time to waste preparing one. Anyway you can download them from the bank and fill them in online.

WRONG – of course you don’t have to have a plan and the ones you get from the bank are very good – for the bank! The problem is that without a plan, you won’t have a clue how you are doing.

A proper business plan gets you to think – in advance – of all the mistakes and problems you might face and how you will deal with them. It will give you a map of your future, something by which you can compare your progress. A business plan is vital!

The internet will make me a million overnight

The Internet is the simplest and cheapest way to start up a business. The Internet is a fantastic resource and it’s making many people very rich.

WRONG? No! Everything I’ve just said is true but… does it apply to you?

It’s really easy to set up an eBay shop, to get products on Amazon but the reason we don’t all do it, is because it takes a lot of time and effort to make money. Selling on the internet is not just about having a shop; it’s about getting your name known, convincing people to buy and it takes time, perseverance and knowledge to get anywhere – just the same as it does with any other platform.

I’ve spent a long time in business and I’ve seen a lot of very good people fail. Not because they were stupid nor because they had bad ideas. They failed because they fell into some of the simple traps I’ve outlined here. You need to plan any new business very carefully before you launch. Think things through in detail before you jump and don’t hesitate to seek advice – but make sure it’s from someone who knows what they are talking about!

Many thanks to Chris H. for this brilliant blog post about what not to do if you are starting up! Chris is a Lawyer and Business Expert, a PPH Super Hero and he  is also one of our Ambassadors. He specialises in business plans, consultancy and in providing legal advice. Check out his Hourlies and if you need some advice from an expert with over 40 years of experience,  he’ll be happy to help you out!

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Definitely sound advice! But hey, PPH, your portfolio items for things like documents STILL aren’t working in Chrome and IE10. And I only reported it two months ago. I’d love to see Chris’ portfolio document. If I could…


Hi digitaltoast!

Thanks for your message and feedback. We are aware that this feature could use some improvements, but you can check out documents by clicking the document item in the portfolio – now look to the bottom of the screen and there’s a little download button on the right hand side in a black footer.

Hope that helps but let us know if you need further help!

Kind regards,



Ah! Thanks! Has it always been like that?! I’d have never have thought of looking way, way down there. I used to have to “view source” then dig around for the file link. What an unusual, unintuitive and unfriendly design. Hey, you know, there’s this great site called PPH where you can hire people who can make a site work really well 😉
Thanks for the tip. If I was a PPH seller I’d be a bit irate that anything except images was so difficult to see,


All good apart from the limited company being a ‘get out of jail free’ card. If you are proven to have been negligent then you will be sued personally. Also in order to avoid the compensation claim you would have to dissolve your company and the person suing would make a claim on the assets.

Dana Diotte
Dana Diotte

Agreed. I would say the single most important thing is the business plan and the most important part of the business plan is the market research. The market research drives the rest of the business plan. Cashflow and personal budget is equally important. It took me 10 weeks putting in 35 hours a week to come up with a business plan.

Yaw Ansong
Yaw Ansong

The best article I’ve read on PPH blog…

Samir Khanal
Samir Khanal

This is a definite myth buster article you have Chris.
Loved it. Learned a lot from it.

Everything you get is from your effort. Its easu to look at someone and say that they have earned a lot so easily but we cannot see the effort behind it.
Thanks for the share.

Gemma Reeves
Gemma Reeves

Great pieces of advice especially if you’re thinking twice about the business you set up. It’s also a good idea to know what type of office space you need and the perfect timing when you need to get one. I came across this site that assists people in looking for office spaces all over the world. The company can help determine the most suitable office space for your business so you can accommodate your customers and potential clients.

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