Mistakes Entrepreneurs Make in Business

Becoming an entrepreneur is a scary proposition; a daunting task to most.  Even if you’ve got a great idea, prepared a business plan, secured financing and are ready to launch your new venture, there are often missteps that will be made along the way.  Here are some of the biggest mistakes people make when starting a new business.

Sticking with one idea for too long.  While a single idea can be your catalyst for entering the market, you shouldn’t be afraid to build upon it and explore new options.  An entrepreneur should always be thinking about growth.  While you don’t want to get ahead of yourself, you should think about where the market is headed at every turn.  Stay open-minded and explore new ideas.  Put them out into the marketplace and see if they stick.

Being product-driven not customer-driven.  Every entrepreneur must remember that “in the world of capitalism, the customer is king.”  Even if your product is better, stronger and smarter than anything else out there, your customers won’t buy it if they don’t want it.  Make your customers a priority.  Ask them what they want.  Do your research.  Understanding your customers’ needs should be your first priority.

Spending money before you make it.  You need to have a well thought out financial plan in place.  Even if your idea is great, you need to be prepared that it might take a while to launch and become successful.  It might not be the best idea to bring on additional employees at the start of a new venture as you have to ask yourself how you’ll pay them.  Bottom line: don’t get ahead of yourself financially.

Not having a clear focus.  You should always and I mean always have a business plan in place before you launch into the world of entrepreneurship.  You should set both short and long-term goals for your business.  This allows you to keep yourself if check and check your progress along the way.  “Without a clear vision of where your company is heading, your great idea can get muddled along the way”

Relying too much on a single consumer base.  Having one large customer in the beginning might be a great way to get your business off the ground and up and running but don’t rest on your laurels.  Always have a plan as to how you can acquire new customers and broaden your reach in the marketplace.  Let’s say you have a customer that generates a substantial amount of revenue for your business but then they themselves go out of business, where will that leave you?  While targeting a specific audience or demographic is a great recipe for success, you need to market your product as inclusive to all and not exclusive to some.

Not doing your market research.  Oftentimes, entrepreneurs overestimate the size of their potential market which throws off the size of their potential bottom line.  Be careful about defining your market segment too broadly and make sure to do your research on the competition that will also be vying for your customer’s attention.  Think about what your customers incentive might be to buy from you instead of someone else they may have been buying from for a long time prior to your launch.  Is there enough demand in the market to support the introduction of your product regardless of how new and innovative it may be?

Lack of experience.  Not knowing the industry you’re entering into enough could be your downfall and lead to costly mistakes.  Before launching your start-up, try to gain experience in that market prior.  Use your past experiences to create your future ones.  Reach out to mentors or ex-coworkers for brainstorming ideas.  And of course, always be networking.

You’re getting in for the wrong reasons.  Being fired from a job doesn’t necessarily mean you always have to go out and start up on your own.  While often this is a catalyst for some entrepreneurs, it might not always be the logical next step.  Take some time to honestly assess your strengths and weaknesses before sinking your time, effort and money into your own venture.  However, if this is something you’ve put a lot of thought into, wanted to do for a long time and have done your homework, then go for it!

You think you can do everything yourself.  That tends not to be the case most of the time.  As I mentioned above, don’t hesitate to reach out to your network for business advice and emotional support.  There will come a time when you’ll need to bring on employees if your venture is taking off.  Remember, asking for help isn’t always necessarily a bad thing.

Lastly and probably the biggest mistakes entrepreneurs make is having unreasonably high expectations for immediate success.  It often takes time, countless hours and lots of effort to come up with a great idea, launch your product and build a brand.  Don’t forget that.  Jumping in head first might work for some but it’s not ideal.  As cliché as it may sound, it’s best to remember that oftentimes slow and steady wins the race.

Here are some articles you might want to check out regarding the mistake entrepreneurs often make in business:

“Stupid Mistakes Entrepreneurs Make in Business”: http://wetalktoday.com/entrepreneurs/stupid-mistakes-entrepreneurs-make-in-business

“12 Mistakes Entrepreneurs Make”: http://www.askmen.com/money/career_100/137_career.html

“4 Mistakes Young Entrepreneurs Make That Waste Time and Money”: http://www.businessinsider.com/mistakes-that-young-entrepreneurs-make-2012-10

“Avoiding Common Mistakes Entrepreneurs Make”: http://www.bizjournals.com/triangle/blog/2012/03/avoiding-common-mistakes-entrepreneurs.html

Until next time…