The Honeymoon Trap - The First Challenge of the Entrepreneur
The Honeymoon Trap is the first challenge faced by the entrepreneur. We all know what we mean when we refer to the "honeymoon period". But what is the honeymoon trap?
The honeymoon trap often happens with start-up enterprises shortly after they get off the ground. One of a number of things happen, that gives the entrepreneur reason for optimism:
- They complete an early, quick sale
- They receive positive press coverage
- An unexpected investor shows up with cash
- A benefactor gives them access to money in the form of a grant or low-interest loan
You get the picture. Early in the lifecycle of a business, something good happens. That good feeling envelopes your whole body. It gives you a reason for hope. It energizes you. These are the things that remind you of why you started the company.
Why is this a trap?
So, what is wrong with this? Why do we call it a trap?
Because, after an early win or two, it's common for a person to think "this is easy". And therein lies the trap. Business owners should never think it's "easy". Easy is a lie. Easy is a trap.
Take a look at the business cycle curve in the image below. We call this image the "Sigmoid Curve". And it reflects the growth cycle of most businesses. The honeymoon trap comes early in the process, soon after you experience that new growth as a start-up. And it is often followed by a drop in performance (not shown in this version of the chart).
Therefore, it's critical that business owners avoid the honeymoon trap and stay focused on their business and drive them through this first phase. A few suggestions for entrepreneurs include:
- Put cash in savings and use it to ride through the future dips
- Leverage the good events to spawn even more growth (use one sale to drive another, use one piece of media coverage to drive a second and a third...
- Use the positive energy to attract top talent in the form of advisors and consultants
- Hire a business coach to help keep you focused through the times ahead.
The honeymoon trap is something every new business owner will likely face. Being prepared for it will allow you to weather the future challenges and propel you out of the learning phase, and into the growth phase. That is if you void the "Three Feet From Gold Trap". (More on that to come).