One of the biggest parts of starting a business is to conquer the many fails it may bring. Being part of a startup isn’t easy. It takes sweat, hard work, and even mistakes for successful businesses to make it. Through success and failures, a startup success is not about luck, but rather following the right process and learning from mistakes.
While making mistakes can often be inevitable, taking the right measures to avoiding mistakes is part of the process. Here are ten common mistakes entrepreneurs make and why you should avoid them.
Spending too much or not enough
When starting out as a new entrepreneur, money is most likely one of the biggest concerns you may have. Having a saving for your pre-launch flow will be the best thing you can do for your business’ successes and failure. Save money to make sure everything else is prepared.
There are two types of mindsets we usually see in new entrepreneurs. The first is the “spend money to make money” mentality while the second is the “save on spending until there’s decent cash flow.”
When taken to the extreme, these attitudes can be harmful and affect your business. Spend your savings wisely, but don’t be afraid to invest in quality products and services. After all, what you’re selling must be worth selling to others.
Assuming you have no competition
Having a new business can be exciting. But assuming that you have no competition can often lead to thinking that their product is ahead of the game and in a category of their own.
In reality, it is nearly impossible to have no sort of direct competition. This is of course unless you have invested an entirely new product. Before you consider your business as a major competitor, do your research and find out what other companies are selling and how you can differentiate your business.
Hiring based on cost
Hiring the wrong people just to save on costs can ultimately lead your business to failure. Even when funds tight, skimping on the cost of new hires will surely having you pay for it in the long run. Low-cost employees are usually cheap for a reason. This means they are more likely to be unreliable, unskilled, inexperienced or all three.
Not setting realistic goals
Fresh entrepreneurs can be trapped on the “big idea,” but they often work without a structured plan. In reality, you must set realistic goals in order to reach success. Make a point of setting short and long term goals and keep them precise. Don’t just say “I will reach 5 million sales this year.” Set realistic goals for your company and determine what steps you need to reach your goals.
Entrepreneurs think that products or services are so major that they can only rely on word of mouth. But in reality, most startup businesses need to invest in marketing. Marketing includes SEP, Public relations, paid advertising, and SEO. Consider where your competitors are putting their money in marketing and find out how you can differentiate yourself from the competition.
Margins too small
A healthy profit margin is critical to the success of your business. Setting your margins too small will make like much harder for you in the long run. Your customers will not be excited when you increase prices later on. Increasing your prices, later on, may even cause you to lose customers rather than gain more profit from repeated customers.
Consider the production and operating costs of your business and determine how flexible you may be. Will you be able to reduce these costs in necessary? If that’s not possible, choose a higher profit margin to accommodate the costs.
Not getting help
It’s common for entrepreneurs to think that no one will do the job as well as you can. But just because you already know your products and services inside out, doesn’t mean someone else won’t be able to. Hire a knowledgeable and experienced consultant who can give you a better perspective on your business and its target market.
Putting your product before your customers
When creating your businesses, it is vital that you have a customer-first mentality. Many entrepreneurs are so focused on making a profit; they forget that having a sustainable business means having loyal customers who repeat services with you over the long term.
Becoming an entrepreneur isn’t easy, and it requires a lot of time, effort, money, and hard work. But what doesn’t mean you should give up. Learning from these mistakes can also lead you to a new direction for your business and entrepreneurship.