Thinking of Starting a Business? Avoid These 7 Mistakes.

Starting a business usually begins with optimism.

You have an idea. You see an opportunity. Perhaps you have identified a problem that you believe is not being solved well enough. Perhaps you have a product you are passionate about. Or perhaps you simply believe that it is time to build something of your own.

That energy matters. Entrepreneurship needs ambition, persistence and the willingness to take risks.

But there is another side of entrepreneurship that is often less exciting: the discipline of making decisions before you have all the answers.

A good business does not start simply because the founder has a good idea. It starts when an idea begins to connect with a real customer, a workable business model, a realistic financial structure and an ability to execute.

This is not just a theoretical concern.

These numbers should not be interpreted as a prediction that a particular new business will fail. They come from different populations and methodologies. But they point toward an important lesson:

For an aspiring founder, that means preparation is not about eliminating risk. It is about understanding the risk before committing too much to it.

Here are seven mistakes worth thinking about before you take the leap.

One of the easiest mistakes for a new founder to make is to fall in love with the product before understanding the customer.

You have an idea. You imagine the product. You think about the brand name. You design the logo. You consider the packaging. You create an Instagram account. You build a website.

And before long, you have invested significant time and money into something that has not yet been properly validated.

The fundamental question, however, is much simpler:

The U.S. Small Business Administration puts market research at the centre of business planning because it helps entrepreneurs understand demand, market size, competition, customer characteristics and pricing before committing to the business.¹

This is especially important because founders naturally see their ideas from the inside. Customers see them from the outside.

You may think your product is innovative. The customer may simply think it is expensive.
You may think your feature is important. The customer may not care about it.
You may believe your product solves an urgent problem. The customer may consider the problem inconvenient, but not important enough to pay to solve.

That difference is critical. Before asking:

ask:

That does not mean every assumption must be proven before you start. It means you should know which assumptions are most important, and test those first.

Once a founder has identified a product, another common mistake appears:

It sounds attractive. If everyone can use the product, then the market must be huge.

But a large theoretical market does not automatically create a viable business. Different customers have different needs, purchasing power, behaviour and reasons for buying.

A university student may prioritise affordability.
A corporate customer may prioritise reliability and service levels.
A premium consumer may care more about convenience, quality and experience.

The product may technically serve all three. The proposition probably should not be identical for all three.

This is why market segmentation matters. The SBA recommends examining factors such as demand, market size, location, market saturation and what customers currently pay for alternatives when evaluating a business opportunity.¹

A founder therefore needs to make a choice:

• Who is the customer we understand best?
• Who has the strongest need?
• Who is most likely to buy first?
• What are they willing to pay?
• Why would they choose us instead of an existing alternative?

Starting with a narrower customer segment does not mean limiting the long-term potential of the business. It means creating a clear starting point.

This is where many business plans become disconnected from reality.

Imagine a five-year projection:

• Year 1: Rp500 million
• Year 2: Rp1.5 billion
• Year 3: Rp3 billion
• Year 4: Rp5 billion
• Year 5: Rp8 billion

It looks impressive. But the most important question is:

A revenue projection should not simply represent what the founder wants to happen. It should be built from assumptions that can be explained. For example:

If a product sells for Rp50,000 and you expect to sell 10,000 units, the revenue assumption is Rp500 million.

But then the real questions begin.

• Where will those 10,000 units come from?
• How many customers do you need?
• How often will they buy?
• What conversion rate are you assuming?
• How much marketing will be required?
• What sales capacity do you have?
• What operational capacity do you have?
• How quickly can you realistically acquire customers?

This is where a financial model becomes useful. Not because it can predict the future perfectly. It cannot. Its value is that it makes your assumptions visible.

The SBA similarly recommends that financial projections be connected to the business plan and funding requirements, with projections becoming more detailed as the business plan becomes more formal.¹

A financial model should therefore not be treated as a decorative spreadsheet at the end of a business plan. It should be a tool for asking:

That is a much more useful question than simply asking, “How much revenue do we want?”

Another mistake happens when founders calculate the cost of starting the business but forget to calculate the cost of surviving while the business is becoming sustainable.

Imagine you need: equipment, renovation, technology, initial inventory.

You add everything together and conclude:

But what happens after opening? You still need to pay:

And your customers may not pay immediately. This creates one of the most important distinctions in business:

A sale can create revenue without immediately creating cash. A business can therefore appear profitable while cash is being absorbed by receivables, inventory, expansion or other working-capital requirements.

Bank Indonesia's information framework for potentially financeable MSMEs explicitly includes business information such as sales, growth projections, financing requirements and financial information including profit-and-loss and cash-flow data.⁵

This is an important point for Indonesian founders. Financial planning is not only about calculating how much money is required to buy assets. It is about understanding:

The answer may be significantly larger than the initial investment.

Hiring people can feel like progress. The business is growing. The founder is busy. There is too much work. So the obvious response seems to be:

Sometimes that is absolutely correct. But sometimes the real problem is not the lack of people. It is the lack of process.

Before hiring, ask:

• What exactly needs to be done?
• How frequently does it need to be done?
• Is this workload permanent?
• Can the process be simplified?
• Can technology solve part of it?
• What value will the new employee create?

And perhaps most importantly:

A new employee is not simply another expense line. It is a commitment. The employee may improve capacity, increase sales, reduce operational risk or allow the founder to focus on higher-value work. But if the economics do not support the hire, the additional fixed cost can create pressure precisely when the business is still fragile.

This is particularly relevant in Indonesia, where BPS identifies limited access to capital, human-resource and management quality, and legal issues among challenges faced by micro and small industries.⁴

The objective is therefore not to build the biggest team as quickly as possible. It is to build the right organisation for the stage of the business.

The opposite problem is equally common. Some founders never delegate. They become:

And eventually, the person who approves every small decision.

In the early stage, some of this is unavoidable. The founder needs to understand the business deeply. But there is a difference between being deeply involved and being indispensable to everything.

If every important decision must go through the founder, the business may not really be scaling. The founder may simply be creating a more complicated job for themselves.

The transition from founder-driven activity to business-driven activity requires systems: clear roles, clear processes, clear priorities, clear decision rights. And eventually, people who can make good decisions without asking the founder about everything.

This is particularly important because entrepreneurship is not only about creating a product. It is about creating an organisation capable of delivering that product consistently.

A founder's role should gradually evolve from:

That transition does not happen overnight. But it needs to begin.

Growth is attractive. More customers. More revenue. More employees. More locations. More products. More visibility.

But growth can also magnify weaknesses.

• If your margins are weak, more sales may create more pressure.
• If your operations are inefficient, more customers may create more problems.
• If your working capital is insufficient, growth may consume more cash.
• If your team is not ready, service quality may decline.
• If your product-market fit is weak, spending more money on acquisition may simply accelerate the problem.

The recent CB Insights analysis is particularly relevant here. Among the 431 VC-backed companies it examined, poor product-market fit was cited in 43% of failures, while unsustainable unit economics appeared in 19%. Capital exhaustion was the most common endpoint, at 70%, but CB Insights explicitly notes that running out of capital was often the final consequence rather than the root cause.²

That distinction matters. The question is not simply:

It is:

Before scaling, ask:

• Is customer demand proven? Are customers returning?
• Is the value proposition clear? Do the economics work?
• Are margins sufficient? Can operations handle additional volume?
• Is the team capable? Is there sufficient cash?
• Can the organisation absorb the additional complexity?

Sometimes the right next step is not scale. Sometimes it is to fix the business you already have.

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The Seven Mistakes Are Actually Connected

At first glance, these seven mistakes seem unrelated.

But underneath them is one common issue:

A founder may hire too early because the business economics are unclear.
A founder may underestimate funding requirements because working capital has not been modelled.
A founder may overestimate revenue because customer assumptions have not been tested.
A founder may expand too quickly because the operating model has not been proven.
A founder may believe the business is healthy because revenue is growing, without looking closely at margin and cash.

This is why business planning should not be treated as an administrative exercise. It is a decision-making process.

The SBA describes a business plan as a roadmap for starting, managing and growing a business, while also noting that lean startup plans can be useful when a business needs to move quickly and refine its assumptions regularly.¹

That is a useful way to think about planning. You do not need a 50-page document. You need a clear understanding of the assumptions that matter.

You Don't Need Perfect Answers

There is another important lesson for aspiring founders:

Markets change. Customers change. Competitors respond. Costs move. Technology evolves. Your original business model may change.

That is normal.

The purpose of planning is therefore not to eliminate uncertainty. It is to make uncertainty visible enough to manage.

• Start with reasonable assumptions.
• Write them down.
• Test them.
• Build the numbers.
• Look for weaknesses.
• Then revise.

The earlier you discover an unrealistic assumption, the cheaper it usually is to change.

This mindset is especially relevant for younger founders and students. OJK's 2024 National Financial Literacy Survey found Indonesia's overall financial literacy index at 65.43%. Among students, the literacy index was 56.42%, compared with 78.32% among entrepreneurs/businesspeople.⁶

The figures do not mean that students are incapable of managing business finances, nor do they establish a direct relationship between financial literacy and business success. But they do reinforce a broader point:

You do not have to become an accountant. But you should be able to understand what your numbers are telling you.

Before You Take the Leap, Ask Better Questions

So, if you are thinking about starting a business, perhaps the first question should not be:

Instead, ask:

• Who is my customer? Can I describe the person or organisation that is most likely to buy?
• What problem am I solving? Is it a problem that matters enough for someone to pay for a solution?
• Why would they choose me? What makes my proposition different or better than the alternatives?
• How will the business make money? Can I explain the revenue model simply? What does each sale contribute? Do I understand price, variable cost, margin and contribution?
• How much capital do I actually need? Have I considered both initial investment and working capital?
• What happens if sales are lower than expected? Can the business survive a weaker-than-planned first year?
• What needs to happen in the first 90 days? What are the few things that matter most right now?

These questions will not guarantee success. But they can help you avoid making expensive commitments based purely on enthusiasm.

Start With Clarity

Starting a business will always involve uncertainty. There is no checklist that can eliminate it. There is no financial model that can predict the future perfectly. There is no advisor who can make the risk disappear.

But there are ways to make the uncertainty easier to understand.

• Start with the customer.
• Validate the problem.
• Clarify the business model.
• Build the numbers.
• Understand the funding requirement.
• Think about cash, not just profit.
• Build the right organisation.
• And before scaling, ask whether the business is actually ready.

At Astakara, we believe founders do not always need more complicated advice. Sometimes they need better questions. Sometimes they need a practical tool to organise their thinking. And sometimes they need an experienced perspective to help them see something they cannot easily see from inside the business.

That is the role we want Astakara to play. Not to make the decision for the founder. But to help the founder make a better-informed decision.

Because a business does not become stronger simply because the founder works harder. It becomes stronger when the founder understands the business more clearly and makes better decisions.