"Don't do that"— Shark Tank's Lori Greiner talks about the biggest mistakes startup entrepreneurs make

Lori Greiner is one of the Shark Tank's most successful entrepreneurs and investors. She has witnessed many startup entrepreneurs commit mistakes on their path to entrepreneurship. As one of the notable investors on the show, Greiner has contributed insights into common pitfalls that lead to the failure of a new business.

In an interview with Entrepreneur dated back to October 2014, Lori Greiner identified three of the biggest mistakes entrepreneurs make. She revisited these mistakes in a recent Instagram post on December 8, 2024, where she reiterated her advice, saying,

"One hiring on too big of a staff, stay lean and mean. Too much inventory without anywhere to sell it. Don't do that. Get a big office? Not necessary, work from home."

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Shark Tank investor Lori Greiner's key advice on avoiding common startup pitfalls

1) Hiring too big of a staff

One of the biggest mistakes that entrepreneurs often make is hiring too many people too soon. The Shark Tank investor highlighted that new business owners sometimes feel pressured to hire a large team. This can lead to unnecessary expenses, especially when resources are limited.

“Don’t go on a hiring spree. Stay small and don’t bring anyone on staff until you absolutely need to,” she explained.

According to Greiner, entrepreneurs should be prepared to handle as many responsibilities as possible on their own before hiring staff. This approach helps to manage costs and ensures that the entrepreneur remains closely involved in all aspects of the business. She underscored the importance of being hands-on in the early stages:

“You answer your own phone or get an automated system..You can keep track of your own books,” she said.

Greiner emphasized that entrepreneurs should only hire when necessary, and even then, the process should be gradual and carefully considered.

"Be willing to do as much as possible by yourself up until you simply have no choice but to hire someone; and even then, you will have to stay intimately involved in the day-to-day operations, because even the best employee will never be as vigilant as you will," she added.

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2) Too much inventory

Another common misstep entrepreneurs make is ordering large inventory before confirming the demand for their product. The Shark Tank investor emphasized that manufacturing products before acquiring an order can create excessive financial burdens.

“Never manufacture a product before you even get your first order,” she explained.

She highlighted that this mistake can result in entrepreneurs being stuck with unsold inventory, which incurs storage costs and strains finances. Additionally, it decreases the ability to use a prototype to perform market research, a crucial step for validating a product’s potential success.

The Shark Tank investor stressed that entrepreneurs should carefully consider their market and competitors before placing inventory orders.

“Blindly guessing how much inventory you might or might not need is a recipe for disaster,” she said.

Instead, she advised entrepreneurs to assess the demand for their products and make inventory decisions based on that analysis.

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3) Opting for a large office

Greiner also pointed out that overhead costs should be controlled in the initial stages of a business, especially in terms of office space. She said that entrepreneurs should not lease expensive offices before the business is stable enough to afford them. She emphasized,

“Avoid spending money unless you absolutely have to.”

The Shark Tank investor observed that, at first, home-based working will reduce the overhead cost of an entrepreneur and save his money. She worked from her home for five years when she launched her first product, a jewelry organizer.

"Try to work out of your home for as long as you can, even if you have a few employees, to keep overhead low."

Greiner continued, stating that the flexibility of working from home provided her with greater freedom to manage her business on her terms.

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All the new episodes of Shark Tank air on Fridays at 8 pm ET and are available to stream on Hulu.