Entrepreneurs are the risk takers putting their ideas on the line to change the world. They are an important element in business because they not only create job opportunities, but they also stimulate industry and economic growth through innovation.
We all make mistakes. It’s what makes us human. But when starting your own business venture, mistakes can be costly in terms of time, money, and reputation so avoiding blunders is ideal.
We’ve put together a list of the biggest mistakes entrepreneurs make then boiled that down to eight really really massive mistakes.
1. Money. Having the necessary funds when starting a new business or launching a product is essential because there will always be unexpected expenses. It could be that the launch is delayed or sales are slow to start, but having a financial cushion of at least 25% of your financial model projection makes these a challenge not the end.
In addition to standard backing and lending, it is essential to arrange for additional financing in case of growth, emergency, or an amazing opportunity. Growth is especially overlooked and often funding isn’t ready when it’s time to move up to the next level of the company.
To avoid financial pitfalls, have a little extra set aside above and beyond what is necessary to launch and spend wisely.
2. Preparation. Research and plan more than you need because protecting your efforts is vital for the success of your business. Be savvy when guarding your intellectual property. Be persistent with your market research. Be aware of what gives your product an edge above the competitors’ options.
Test their products so you know exactly what you can offer that they do not. Prepare yourself with research to know what you need to do and which steps will lead to the success of your vision.
3. Support. No one person knows everything and accepting this is a first step to building something great as a team. You will need to confer with experts and hire people who know more than you do about certain areas.
Choose people who fit the company culture, take on the shared vision, and whose skills and expertise fit with their roles. Don’t fall into the trap of promoting people beyond their level of competence.
It is also essential that you hire the right people, not just the people you know. This is when it takes the most strength to tell your family that your venture isn’t an excuse to put job offers in the Christmas cards this year.
To avoid staffing issues, hire the right person to take on the right responsibilities and trust in your choice while being aware of issues that may arise. Delegate tasks, but don’t ignore red flags if they arise.
4. Marketing. Once a product is developed, you may feel your work is done and you can sit back and wait for the sales to roll in, but that’s actually when the work is just beginning.
Now, it’s time to tell the world about what you’ve done. Your creation won’t just sell itself, unless it’s a chatting robot with its own talk show. Don’t fear rejection from potential customers because it is inevitable.
Not everyone will love your creation but many will and communicating with the outside world is the only way to give you a chance to reach either population.
5. Customer care and retention. For all your innovation, dedication, and diligence, if the customer has an issue and you ignore them you have failed them. Existing customers not only build your business, but they also help bring in new customers through referral.
Losing a customer and finding a new one costs more than keeping current customers happy, so focus on cultivating a positive relationship with your customers based on helping them with their needs, improving your product to suit their growing and changing needs, and addressing their concerns or issues in a prompt manner to retain them.
6. Patience. It takes time to build an empire or even a customer base, so be patient with yourself, your work, and your staff because there is only so much growth that can be done in a single day.
You’ve done the inventing, the market research, the business plan, the hiring, the advertising, and now it’s time to work hard to keep all that up until the customers, industry leaders, and press notice. Respect that you’ve created done what you can and be patient.
7. Expectations. Do not set expectations so stringent that you cannot be surprised. Business is just as much about flexibility and innovation as it is about planning.
When facing financial backing especially, having realistic timely expectations calibrated to current economic conditions is key when negotiating with potential investors. How much equity ownership will you offer as investment incentive? Be prepared for compromise both with investors and with vendors.
8. Long-range planning. When you had your big idea, you probably tried to dream big with your feet on the ground, but there is also a time to realize that your big idea could be the next big thing.
It’s important to plan accordingly and realize that there will be challenges, growth, and milestones. Brainstorm how you will face them and make sure you have a system in place, even just on paper, for support throughout the long-term.
When starting out, there will always be mistakes, but here’s hoping you skip these eight big mistakes entrepreneurs make.
Trust yourself, include trusted advisors and staff with related expertise and experience, work with the necessary resources while keeping eye on the next step in your vision.
Successful collaboration with your investors, staff, and customers creates a winning trifecta for entrepreneurial achievement.
What mistake would you add to this list? As an entrepreneur, which mistake did you make and what lesson did you learn?