The Top 10 Mistakes Every New Entrepreneur Makes (and How to Dodge Them)

Starting a business is thrilling—full of promise, potential, and excitement. But let’s be real: most new entrepreneurs don’t just make one mistake—they make many. Some missteps are minor, while others can send your business straight into the ground.

I’ve seen brilliant ideas flop because of avoidable errors, and I’ve watched scrappy entrepreneurs turn things around by recognizing their mistakes early. So, before you dive headfirst into launching your startup, let’s talk about the ten biggest mistakes new entrepreneurs make—and more importantly, how to dodge them.

Skipping Market Research: Falling in Love With an Idea Instead of a Market

The Mistake:

Many entrepreneurs get so excited about their business idea that they forget to ask the most important question: Does anyone actually want this?

Remember Juicero? It was a high-tech juicer startup that raised $120 million in venture capital. The problem? Their expensive, Wi-Fi-connected juicer ($400!) simply squeezed juice from pre-packaged pouches—something you could do with your hands. When consumers realized this, the company became a laughingstock and shut down.

How to Dodge It:

Before you build anything, talk to potential customers. Conduct surveys, interviews, and test your idea with a minimum viable product (MVP). If people won’t pay for your solution, it’s time to pivot—before you burn through your savings.

Not Having a Clear Business Model: The “Figure It Out Later” Trap

The Mistake:

Many new entrepreneurs assume that as long as they attract enough users or customers, the money will come later. Spoiler alert: it rarely does.

Clubhouse, the once-hyped audio social network, gained millions of users in 2020–2021 but never figured out how to turn engagement into sustainable revenue. As user interest declined, so did their prospects, proving that hype alone isn’t a business model.

How to Dodge It:

Use the Business Model Canvas to map out exactly how you’ll make money. Will you sell products, offer subscriptions, earn from advertising, or charge for services? If you don’t know how revenue will flow in, your business is just a hobby.

Doing Everything Alone: The Lone Wolf Syndrome

The Mistake:

Thinking you can (or should) do everything yourself is a recipe for burnout. Entrepreneurs often hesitate to delegate, believing no one else can do things as well as they can.

Elon Musk is a visionary, but even he doesn’t build Teslas or SpaceX rockets alone. He surrounds himself with experts who execute his ideas. Meanwhile, many solo founders struggle to scale their businesses because they refuse to bring in help.

How to Dodge It:

Hire strategically. Whether it’s a co-founder, freelancer, or advisor, having the right people around you will make a huge difference. Look for people who complement your weaknesses—not just ones who think like you do.

Ignoring Cash Flow: Running Out of Money Too Soon

The Mistake:

Focusing on profits instead of cash flow can kill your business. You might be making sales, but if you run out of cash to cover expenses, you’re in trouble.

Toys “R” Us was a giant in the toy industry but collapsed in 2017—not because it wasn’t making sales, but because it had too much debt and couldn’t manage its cash flow.

How to Dodge:

Monitor cash flow closely. Track how much money is coming in and when. Use tools like QuickBooks or Wave to stay on top of your finances, and always have a buffer for unexpected costs.

Pricing Too Low: The Race to the Bottom

The Mistake:

Many new entrepreneurs price their products too low, thinking it will attract more customers. But if your prices don’t cover costs and leave room for profit, you’re setting yourself up for failure.

MoviePass tried to offer unlimited movie tickets for just $9.95 a month—far below what they had to pay theaters. Unsurprisingly, they burned through cash and shut down.

How to Dodge It:

Price based on value, not just cost. Do competitive research and ensure you have healthy profit margins. It’s easier to lower prices later than to raise them after setting expectations too low.

Neglecting Marketing: Thinking “If I Build It, They Will Come”

The Mistake:

Too many entrepreneurs believe that having a great product is enough. But if people don’t know about your business, it doesn’t matter how amazing it is.

Quibi, the short-form video streaming platform, had Hollywood backing and $1.75 billion in funding but flopped because they failed to market it effectively.

How to Dodge It:

Have a solid marketing strategy from day one. Use a mix of content marketing, social media, SEO, and paid ads to get your product in front of the right audience.

Ignoring Customer Feedback: Building in a Vacuum

The Mistake:

Entrepreneurs sometimes believe they know what’s best for their customers—without actually listening to them.

Blackberry ignored the rise of touchscreen smartphones, believing their physical keyboard was superior. Apple and Android listened to users, and Blackberry became obsolete.

How to Dodge It:

Talk to customers regularly. Use surveys, reviews, and social media to gather feedback and adapt. Your business exists to serve them, not your ego.

Scaling Too Fast: Growing Before You’re Ready

The Mistake:

Expanding too quickly—before you have product-market fit or a sustainable model—can drain resources and collapse your business.

Fab.com, an e-commerce startup, raised over $300 million but expanded too fast, hiring aggressively and overspending. They crashed and burned within a few years.

How to Dodge It:

Grow sustainably. Validate your business model first, then scale gradually. Make sure demand justifies expansion.

Ignoring Legal and Financial Basics: The “I’ll Deal With It Later” Approach

The Mistake:

Skipping legal steps—like registering your business, getting contracts in place, or protecting intellectual property—can come back to haunt you.

Facebook had legal battles with early co-founders because they didn’t set clear agreements early on.

How to Dodge It:

Set up your legal and financial foundations properly. Register your business, separate personal and business finances, and get contracts in writing.

Giving Up Too Soon: Underestimating the Long Game

The Mistake:

Many entrepreneurs expect instant success. When things get tough, they quit too early—sometimes right before they would have seen a breakthrough.

Airbnb’s founders struggled for years, even selling cereal to keep their startup alive. If they had quit early, they never would have built a multi-billion-dollar company.

How to Dodge It:

Entrepreneurship is a marathon, not a sprint. Be patient, stay adaptable, and keep pushing forward.

Final Thoughts: Learn from These Mistakes—Don’t Repeat Them

The path to success isn’t about avoiding all mistakes—it’s about learning from them quickly. Every great entrepreneur has stumbled, but the smart ones recognize their missteps and course-correct before it’s too late.

Which of these mistakes have you seen (or made yourself)?