Money is known to be one of the major causes of problems that can lead business to failure. For a new business, the biggest mistake is expecting instant profit. Young and eager entrepreneurs start up a business with little money, assuming they will earn big and then invest that money again in their business.
It is significant to understand that you cannot get an instant profit at the start of your business. Experts advise not to expect much profit for at least two years. Always prepare for the worst case scenario.
Before starting a business, ensure that you have enough money to sustain you at least up to two years. Start slowly and patiently.
The phrase ‘time is money’ holds true, especially for a business. It is essential for new businesses to manage their time wisely.
Planning everything in advance and ensuring everything is done on time is very important for the prosperity of any business. Ensure the schedule you are making is achievable and stick to it.
Give yourself enough time to perform a task with accuracy. Plan your future projects. Make adjustments accordingly.
Utilize calendars and planners to make sure you don’t miss an appointment or a deadline. Spending time effectively can actually save you money and even earn you more revenue.
#3 Lack of Knowledge/Skills
This is one of the top most mistakes made by entrepreneurs.
It is important that you have ample knowledge about the industry you are entering, your competitors, your target market, current trends, advertising and marketing techniques as well as financial know-how.
You must possess the skills needed to start up a new business. If you are not prepared, educate yourself.
Do proper research, ask other business owners, read relevant books and websites. You may end up with a huge loss if you start your business without having the required knowledge and skills.
#4 Information Overload
The only thing constant is change! This phrase is true as well as change is continuous and we witness it happening all around us.
Today, information keeps changing. New facts and data keeps emerging and replacing old beliefs and trends. Due to this information overload, it gets difficult to find effective solutions.
It becomes a challenge for a new business to sort through this data and come up with good decisions.
However, one easy solution is to look for the authenticity of the data. Check its references, and the writer. Learn to use keywords to narrow a research topic. Start asking successful businessmen about their experiences. Learn from them.
#5 Lack of Direction and Planning
This problem prevails because of not creating a thorough and detailed business plan. Many young entrepreneurs are so excited about setting up their very own business that they fail to prepare a proper business plan.
It helps in focusing on the goal and mission of the business. It determines the financial situation of the business, the roadmap to follow, market research and analysis of the competition.
A business plan is basically an investment to your business.
#6 Working in the Business rather than Working on the Business
Usually entrepreneurs get so worked up with the paperwork, satisfying customers and doing all the necessary things in keeping the business running. They fail to fulfill some other equally crucial tasks.
It is important that you take a day or even a few hours to analyze your business. Determine which area needs attention, do an inventory review, review cash flow of your business, review payrolls and employee benefits.
It is also important to update your corporate minutes, your contracts and your agreements with stakeholders annually. Hold meetings with your managers and other employees to connect with them.
Unfortunately, there are many new startup companies that stick to the age old book rules. They don’t try to create an innovative culture, even majority of the big businesses struggle with innovation.
People get accustomed to the work culture and they don’t think outside the box. Businessmen and employees stay away from change and resist whatever changes that take place in the company.
The best thing to do is to be open to innovation. When bringing a change, ensure that all your employees are prepared for it.
Discuss it with them in a meeting, tell them how important it is to be innovative, make them understand how beneficial it will be.
#8 Trying to Do It Alone
Coping with everything alone is also one of the most common mistake new business owners make. They believe that they can manage everything and don’t need any advice or help from anyone.
Initially, they do seem to be successful in this strategy as the cost is low since they handle everything. However, as the work starts growing gradually, the workload takes a toll on the new entrepreneur.
Mistakes start being made and the quality of work starts decreasing. You may even start losing customers soon.
This is why this strategy is not successful in the long run. Hiring two to three employees is more beneficial for a start up business. It is better to pay a small amount to your workers than lose double the amount in the future.
#9 Getting Clients
For a new business, it is difficult to attract prospects and retain customers. With a small marketing and advertising budget, new entrepreneurs are unable to reach out to a wider audience.
Potential customers are usually hesitant to going for a new business. They prefer going for companies that have experience and a large customer following. However, the good news is big companies charge more.
There are many clients and customers who are looking for companies that provide cheaper, but good quality service. Providing excellent service to them will ensure that they remain your customers and even recommend you to others.
#10 Poor Marketing
Apart from a detailed business plan, a marketing plan is also important for any business.
Once you have a clear idea about your target market and your competition, you can allocate a budget for advertising and promoting your business and decide which medium to advertise through.
You can also decide your product pricing through target market analysis. Make sure you that your pricing can be easily afforded by your target market and that your advertising effectively reaches them.
#11 Becoming overly emotionally attached to making important decisions
To be able to take the right and most pragmatic decision, keeping your mind and heart ( and soul) conjoined while the turmoil seems to be overwhelming your natural decision making power will eventually decide where you land up in your entrepreneurial journey. And that IMO will also be the biggest test you’ll need to pass at that very critical juncture of time.
I have hence always advised startup owners to not overdo what they are doing and end up landing themselves in an emotional hole they can’t or more importantly do not want to get out of. It’s alright being ambitious and passionate, but not desperate!
When you are desperate, decision making goes out of the window and so does the long term vision that you started your venture with.
…and Oh! By the way! In spite of all the overwhelming adversities pointed out above, don’t get disheartened one bit…because though there will be herculean challenges all the way to the top, there really isn’t anything that an entrepreneurial soul can not achieve
#12 Having fun while on the job
You won’t find this challenge on many lists, because many people would not consider it. We not only consider it a skill (fun doesn’t happen often without working at it!), but we consider it so fundamental to all the other skills on the list that it is our top priority. The corollary to this skill must be mastered as well … when you dislike something, stop doing it.
#13 Be disruptive and change the playing field
Don’t settle for the ordinary or the mundane, even if it means a little controversy. Don’t be afraid of ticking someone off. Make those around you think.
#14 People skills
It’s often said that no matter what business you’re in, you’re in the people business. How true that is! Whether dealing with customers, vendors, investors, the press, or employees, well developed people skills can mean the difference between success and failure.