Entrepreneurship is rewarding – there’s no one to boss you around and you have flexible working hours. You just focus on growing your business and making more money. Many aspiring entrepreneurs picture such a life think it’s a walk in the park. Studies show that 20% of startups fail in the first year while 30% do so in the second year. That's why it's important to know the things you need to do and avoid in your entrepreneurship journey.
The study further reveals that by the fifth year, a whopping 50% of the businesses will have failed. And you wouldn’t want yours to be in the statistics as one of the failed businesses. The truth is, most of these businesses fail because of common avoidable mistakes.
It’s important to understand such pitfalls so that they don’t hinder you from creating a successful startup.
In this piece, we’re going to talk about some common mistakes to avoid in your entrepreneurship journey. Let’s get started.
1. Not Being on The Same Page With Your Partners
There have been many cases where small businesses fail because of differences between partners. Not all businesses need co-founders anyway. You can start a business on your own and make it fairly successful. All you need is good planning and you’re good to go.
Sometimes, you will need a partner or two because of the nature of your startup or your business goals. You need to assess the people you will be running the business with. They could be your friends, but do they really share the same values as you?
Are they willing to support your cause till you get your big break? Those are just some of the questions you should be asking yourself when looking at potential partners.
2. Paying Attention to Naysayers
When you decide to become an entrepreneur, you have chosen an unconventional path that many avoid. Many people will try to pull you down. Some of them close family members and friends. They will tell you that you are venturing in into a business that is bound to fail. They will mention things that will destroy your business, for instance competition and your lack of experience in the industry. A significant number of would-be entrepreneurs don’t implement their business ideas because of this.
But what’s worse? Trying and failing or not trying at all? You will obviously make mistakes but the good thing about it is that you will learn from them. The worst case scenario is your business will fail. But the experience gained from the terrible experience will put you in a better position to succeed in the next.
Be organized, believe in your ideas and go ahead and sell your products/services. When you have made it, the same people who discouraged you will want to be associated with you.
3. Implementing a Poor Marketing Strategy
Having an excellent great marketing strategy is a sure-fire way to build a prosperous business. This is a crucial element that you need to put in mind once you start operations. People won’t come looking for your products once you’ve set up your business.
You need to reach out to your target audience and give them enough reasons to use your product or service. Remember that some industries are quite competitive, so you may need to invest heavily in marketing.
Note that putting a lot of money in the marketing department isn’t a guarantee that your promotion strategies will work.
4. Not Coming up With Business Plan
Not having a business plan may prevent you from building a thriving business. Why?
Here are some reasons why you need to develop a business plan:
• It outlines the cost of operating your business (quarterly, annually etc.)
• Assesses your competitors and provides insights on how to be ahead of the game.
• Helps in identifying your target audience
Drawing up a good business plan basically helps an entrepreneur stay organized and focused throughout the entrepreneurship journey.
5. Hiring The Wrong Candidates
One common mistake entrepreneurs make is to hire when they’re not ready. There are probably hundreds of individual who would apply for a position in your company. The problem is when you hire unqualified candidates.
With time you discover that some don’t possess the necessary skills for their specific positions. By then, the damage would have been done and it could take long to recover. When you are just starting out, there’s no need to hire full-timers. Subcontracting is a great strategy used by wise entrepreneurs. Only when the company has grown should you look for full-time workers.
Aside from that, be through during the recruitment process so that you acquire employees who are up to the task.
6. Having a Poor Work-life Balance
When you start a business, it’s not uncommon to work over 100 hours a week. But this shouldn’t go on for long as it will negatively impact your health and overall wellbeing.
The infancy stage of your business will be the toughest, especially if you do not have a partner. Demand may quickly go up, and you will be racing against time to deliver to your customers. In many cases, entrepreneurs are unable to keep up.
Usually, you will be constantly working and won’t have enough time to rest, be with your family or even socialise with friends. Many entrepreneurs have quit their businesses because of burnout.
There are various techniques you can employ to create a healthy work-life balance. One is equipping your team to manage when you’re absent. This way, the business will continue to function normally when you’re away.
7. Not Doing Enough Research on Your Target Audience
Which kind of people are you looking to reach out to? This is one crucial question that no entrepreneur should ignore. When you don’t clearly define your target audience, trust me, your sales will be unbelievably low. And you’ll start wondering where you went wrong.
Creating a buyer persona (a fictional representation of your ideal customer) is one way to better understand your target audience. Benefits of having a target audience are numerous. First, it allows you to craft a unique selling proposition (USP) that caters to your target market. This gives you an edge over your competitors.
Secondly, you reduce costs associated with marketing once you have a target audience in mind. If your business targets people in their early 20s, for example, you can focus on Instagram as the main platform for social media marketing.
In addition to that, you are most likely to receive new customers through referrals if you know your target audience. If you current clients are happy, they will spread word about your great products to their peers.
8. Refusing to Seek Help
Maybe you are the type that believes you can do everything on your own. If this is you, you are making a fatal mistake. It doesn’t matter whether you have read tons of books on entrepreneurship. You’ll still need experienced entrepreneurs to help you see things from a different perspective.
So, surround yourself with successful entrepreneurs. Consult with them during every stage of your business’ life cycle. Let them tell you what hurdles they faced and how they overcame them. If you face a challenge, they’ll advise on how you can tackle it.
Apart from asking for help from other business people, you may also need the help of professionals. For instance, you can hire a financial advisor to help you manage your finances effectively. It’s usually one of the key components of a business.
9. Not satisfying Customers’ Needs
Providing great customer service should be your top priority. According to research, 14% of startups fail because they don’t pay attention to their customers’ needs. When you start a business, one of the main goals is to land loyal customers.
But do you think they’ll continue using your products when you don’t listen to what they really want? Don’t take too long to respond to a query on Twitter, for instance. When you do, even your most faithful customers will start looking for alternatives.
Another thing to keep in mind is that your best employees may decide to quit if your company keeps getting negative reviews. So, focus on finding out customers’ pain points and improve your products and services to meet their needs.
10. You’re Not Honest About Your Products and Services
Being dishonest about the features or solutions offered by your product or service is one of the biggest blunders you can make as an entrepreneur. Let’s say you started your interior design company. A prospect the positive reviews and testimonials on your site and decides to try your services.
But alas, they discover that you are not as good as painted by those fake reviews. They’ll probably call you out and leave negative reviews. This will put a dent on your brand and make it difficult to gain new customers.
Avoid Common Entrepreneurship Mistakes and Enjoy the Journey
Entrepreneurship isn’t for the fainthearted. You will meet many pitfalls along the way, but how you handle them is all that matters. It’s even better if you know some of the common mistakes made by startups.
If you avoid the aforementioned mistakes, your entrepreneurship journey won’t be as arduous. Lastly, don’t be afraid of failure. In the words of Chester Barnard, "To try and fail is at least to learn; to fail to try is to suffer the inestimable loss of what might have been."
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