What are some common mistakes entrepreneurs make when starting out? Here is a list of ten most common mistakes new entrepreneurs make when starting their business. Although mistakes made can be our best teacher, they can be time consuming and costly. So here I want to share with you my hard-won experiences and insights I gained from my own errors in judgment.
1. Make absurd forecasts
Is it realistic that you can attract 60 clients in the first 6 months? Or is 6 more likely? Can you realistically sell 3,000 books of your self-published book in the first year? Or is 300 more likely? Perhaps 600 in the second year and 900 in the third year of your book is more realistic? How do other books like yours sell on Amazon? You should do some serious research and try to come up with realistic forecasts on how your services or products will sell. If you are forecasting unusually high sales and profitability, it indicates that you do not have a realistic understanding of your own business and the market it is in.
2. Trust a customer or a product
That customer or product could be enough to get your new business off the ground. But having just one will certainly not be enough to keep your business growing. Therefore, you must be constantly trying to add a variety of new customers and new products. It is safer for your business to have many small clients instead of one giant client. Ideally, you should strive to attract a variety of clients of different sizes and industries. And you also need to develop a variety of products that can be sold to a variety of customers in different industries. This variety is what will save your business when market conditions and consumer behavior change.
3. Not having a unique selling point
Why will your customers buy your service or product? Because you? Why not someone else? What are you offering that makes your services and products special? What do you bring to the table that others don’t? You better have a good answer to these questions before starting your business. Most businesses start without even asking these questions. That is a very big mistake. If you want to build a successful business, one you can be proud of, you need to answer these questions before starting your new business.
4. Not doing enough marketing
You can never do enough marketing. As a small business, you will be marketing both yourself and your services and products. It’s not uncommon for a small business to spend more time marketing to the owner and building relationships than actual sales. This will help you make a positive impact on your customers and prospects, and help them trust and remember you.
5. Lack of adequate startup capital
You should expect your startup costs to be much more than you initially planned to spend. A small sole proprietorship may have little or no start-up costs. This type of business can become profitable immediately. But if you’re going to need an office, machinery, employees, supplies, etc., your startup costs can easily exceed what you initially planned. And if you don’t have enough capital to pay these start-up costs, you won’t be able to break even.
6. Avoiding and fearing risk too much
As entrepreneurs, we naturally try to avoid uncalculated risks. We generally only take risks that have been well thought out. But we should not avoid or fear all risks. The real problem is that without taking risks, you cannot take advantage of the opportunities that come your way. You can live a quiet and reasonably happy life, but you are unlikely to create anything new, and you are unlikely to make your mark on the world.
7. Being a control freak
This is not a problem if you are a one person business. But as soon as you start working with others, such as partners, spouses, employees, and subcontractors, you need to share decision-making power. As the business owner, you will surely have the last word. And as an owner, your overview is the most important thing. But you need to get your vision across to everyone else you work with, so everyone is on the same page. Involving others in your decision-making process and collaborating on ideas will make your business that much stronger.
8. Not anticipating the needs of your customers
Anticipating what services or products your current customers will need after your initial sale can dramatically increase your company’s sales. It will also create a stronger bond between you and your customers. Let’s say, for example, that you install HVAC systems in residential homes. You can easily come back every spring and fall to do a tune up, change filters, etc. on the system and charge $200 for about 20 minutes of work. The customer will appreciate that you take good care of their system and keep it running smoothly. They get to see you in person and chat with you. Then ask them to give your business card to anyone looking for HVAC work in their home. You can keep your customer happy, make an emotional connection with them, and walk home with an easy $200. If he didn’t come back every spring and fall, the customer would need to find someone else to take care of their HVAC system.
9. Believe in the myth of flexible hours
Starting a business will take a large amount of your time. Even if you start a small part-time business, you will spend a lot of time and effort to get it up and running. But the more time and effort you put into it, the more you’ll get out of it. Therefore, it is better that you choose a business that you love to work for. The more you love what you’re doing, the easier, even fun, it will be to spend as much time, effort, and money building your business.
10. Ignore your customers
This is a big problem for all companies. But as a small business, one of your biggest selling points has to be personalized service. There is always another business desperately trying to take away their customers. The moment your customers feel ignored or neglected by you, they will be more open to talking to other businesses. They will feel less affinity for you and your company. Therefore, you need to find ways to create an emotional connection between your business and your customers.