Nothing can be the joy of you becoming an entrepreneur and starting your own business. The respect and fortune that come with it can’t be fully described. However, there are some mistakes entrepreneurs make when starting a business. And there are problems that can ensue when an entrepreneur starts making these costly business mistakes.
According to the US Bureau of Labor Statistics, not less than 20℅ businesses fail within two years of operations. While there are many outside (economic, environmental, etc) reasons for a business to fail, the mistakes committed within the business by entrepreneurs are highly responsible for most business failures.
This article will highlight some common mistakes entrepreneurs make in their attempts to start new businesses.
9 Common Mistakes of Entrepreneurs when Starting a Business
Below are nine common mistakes new entrepreneurs often make while trying to start a business and what you can learn from them:
Hiring Workers Based on Cost
New entrepreneurs fail terribly in business when they try to act smart about spending money. Many of them try to hire workers who will not charge them too much while working for their businesses.
Instead of hiring highly qualified employees with experience in their business, because of high salary demand, they prefer recruiting workers with little or no experience, who charge less in salary into their business. Which would eventually affect their business operation, and productivity and amass huge losses for the owner at the end of the day.
The idea of being frugal with money when you need to recruit qualified workers will affect your business. It’s only wise to hire competent workers who can help grow your business, instead of worrying about the money you’ll pay them. Look at your salary expenses as a longtime investment for your business.
Setting Impossible Goals
One of the reasons why new entrepreneurs fail and their business goes under shortly after their launch is because they’re obsessed with unattainable goals. The high expectation to become successful overnight is what kills a lot of new entrepreneurs’ businesses.
Some entrepreneurs only think of expanding shortly after they begin operation. They feel unperturbed to know if their business is gaining more customers, or if their products or services need some urgent improvement. Because their goal is to expand quickly, they often end up in a mess which could lead to an uncontrollable waste of resources, effort, and time. Some even end up in bankruptcy and eventually a complete shutdown of the business.
Thinking there is no competition
New entrepreneurs always think once they’re introducing new inventions into the market, they don’t have to worry about the competition. So they discard the idea of having a laid down strategy for possible competition. Some even choose not to spend on marketing. Such a big mistake.
The truth is, there’ll always be competition in the marketplace irrespective of the new product or service you’re introducing to the industry. If you don’t have any competition right away, new brands will emerge to become your competitors. Thus, It’s advisable to have a planned strategy you can use to compete with your competitors in the marketplace.
Trying not to Spend Money or Spending too Much
One thing you can’t avoid as a business owner is spending money. You’ll have to spend money to ensure your business is being run accordingly.
Some entrepreneurs make the mistake of cutting back on the money needed for their businesses’ smooth operation. Which mostly backfires. It’s important to spend moderately on what matters in business.
Also, you need to be conscious of how you spend money in your business. You don’t have to spend too much money for your business to run perfectly. You can operate your business smoothly by spending only on things that will enhance and boost the growth of your business and increase its productivity.
When you spend money on things like marketing campaigns, employment of qualified and competent workers, acquisition of modern equipment, expansion, etc, you’re already spending on things that matter.
New entrepreneurs who neglect the idea of spending money on awareness and marketing of their products or services are making huge mistakes. Some people think once your product or service is the best in the market people will automatically start patronizing your brand. That’s untrue.
Without proper marketing campaigns and awareness, your business may not make sales and it’s also going to be hard to surpass your competitors who are investing in marketing. To experience rapid growth in your business career, investing in marketing is very important. You can start with content marketing, SEO, PR, Influencer marketing, pay-per-click advertisements, etc. Just find out which marketing strategy works well for you and invest.
Prioritizing Product or Service Over People
The goals of every entrepreneur are to start a business, make sales and amass a lot of profits. But there is one important thing that comes before every other goal, which is the prioritization of customers. A lot of new businesses fail because their focus is fixated on launching their products or services, and paying less attention to the people– customers.
Any business that focuses solely on making money without regarding the interest of the people is at risk of collapsing. Know that your product or service has to be a solution to the problem of your targeted audience and solving their problems is the only way to make money. Otherwise, your business will fail within a short time.
Avoiding Customers’ Feedback
Some businesses collapsed shortly after they launched because their owners failed to heed the complaints and advice of the customers. New entrepreneurs commit huge business mistakes when they ignore the feedback of their customers concerning their products or services. Sadly, failure to adhere to customers’ feedback can incur serious consequences, putting your business at risk.
Your business growth can be delayed when you pay little or no attention to customers’ suggestions and complaints. Your Customers’ feedback about your business inventories, operation, or Customer Care Services can provide you with insights on how you can upscale your business, improve productivity and gain more customers.
Thinking You Can Work Alone
Young entrepreneurs often assume they know more about their products and services than any other person, so they have no intention of seeking other people’s assistance.
By running a business all alone you’ll eventually get overwhelmed by the activities and even experience burnout.
Don’t think you don’t need the help of other people in your business to achieve your goals. You may have the right passion for success, but your decision to work all alone can make you fail spectacularly.
For success to be achieved, you need people. Your business will only grow and produce the intended results you wanted when you sought the assistance and advice of other people.
Fear of Taking Action
Fear is one of the greatest mistakes made by new entrepreneurs while starting a business. The constant hesitation to make decisions and take bold steps is what’s affecting the goal of many businesses to grow.
As a new entrepreneur, you need to learn how to take risks in business and how to be swift with your decisions for success to be achieved. Know that being incapacitated to take action in your business because of fear can hugely affect your business operation and also put a halt to its growth. I’m sure you’ll not want that to happen.
Making mistakes is part of the nitty-gritty of growing a profitable business. You can’t escape it. However, you can avoid repeating the common ones like the ones listed in this article and watch your business grow dramatically within a few years.