Building a business from scratch is not an easy task. As an entrepreneur, you will make a lot of mistakes and face failures along the way. But, that is how real entrepreneurs grow. The upside of your willingness to take risks and innovate is that you get to create jobs, innovate new services, design, products and bring your creativity to life. However, to run a successful business and gain a competitive edge, you want to work smarter, not harder. To achieve this, it’s essential to be aware of some common entrepreneurial mistakes that can ruin your business.
Here are eight mistakes entrepreneurs make that lead to business failure:
- Not considering your competition- You may underestimate your competition or, worse, not even consider it. You may also believe that you are offering the best products and services in the market and forget about your competitors. It can be your biggest mistake as an entrepreneur. Unless you have invented an entirely new product, there will be someone who already has a market share in your niche. You should analyze your competitors and their offerings and act accordingly.
- Not setting goals- You may not determine what your ultimate aim is and work blindly. Working in no specific direction can create a lot of confusion in your organization. You must create short-term and long-term goals and take steps that take you closer to your goal—set goals for yourself, your employees, and your company.
- Not managing your money wisely- Money will be a huge concern for you as an entrepreneur. Most entrepreneurs have limited money, especially in the early stages of business, and those that do have money can fall into the mindset of ‘you need to spend more to earn more,’ which can be equally destructive. Instead, take into account your finances and manage your budget wisely, taking into consideration operating costs, paying yourself, taxes and investing back into the business
- Making hiring decisions based on cost- When funds are tight, it might be tempting to hire cheap employees. However, in the end, you can sometimes end up paying the price. Cheap employees may be inexperienced or unreliable. Don’t pay more than your employee’s worth, but remember, it may be worth it to spend a bit more for someone who knows what they are doing. Employees are the backbone of any organization – hire accordingly.
- Not having a marketing plan- If people do not know you exist, you will not be in business for very long. Not marketing your product or service is the biggest entrepreneurial mistake you can make. You must promote your products and services in a variety of ways to increase your revenue. Formulate a marketing strategy focusing on your target customers’ problems and the benefits you offer. Execute, analyze and revise the marketing plan regularly. It will help you attract more (and the right) customers in the long run.
- Not paying attention to your customers– Not giving importance to the customers’ feedback is the worst mistake you can make as an entrepreneur. You may offer the best product/service, but what’s the point if no one is buying it? You must have a customer-first mentality. Prioritize your customers’ needs and create offerings that solve their biggest problems.
- Ignoring contracts- An entrepreneur’s biggest mistake is failure to implement contracts. Many of your first few business transactions can be with your friends or family. No matter how good a relationship may be, they come to a halt if agreements are not put in place. Getting a contract allows you to pre-decide on the services and avoid confusion in the future.
- Not having a mentor- In the beginning, you may take pride in saying that you did it all on your own. However, satisfying your ego and not asking for help will lead to the downfall of your business. A mentor/business coach will help you work more strategically, help you create actionable plans, streamline your business processes and operations, take calculated risks, and make better decisions. They will help you to avoid mistakes or re-inventing the wheel. Look for a business coach who has experience in your industry or has a particular area of specialization that you need, e.g., mindset, marketing, sales, etc.
About the business
An experienced business coach can help you avoid many common business mistakes and help accelerate your business growth. At Inspire & Drive, we specialize in helping creative businesses owners to create a S.I.M.P.L.E Plan© so you can effectively scale your business without stress. If you’d like our help to take your business to the next level, visit us at www.inspireanddrive.com or Schedule a discovery call today.