What are some of the common mistakes entrepreneurs make when starting out? Here is a list of ten more of the most common mistakes new entrepreneurs make when starting their business. Although mistakes made can be our greatest teacher, they can be time-consuming and costly. So here I want to share with you my hard-earned experiences and the insight I gained from my own lapses in judgment.
1. Making Absurd Forecasts
Is it realistic that you can bring in 60 customers 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? Maybe 600 in the second year and 900 in your book’s third year is more realistic? How are other books like yours selling on Amazon? You need to do some serious research and try to come up with realistic forecasts about how your services or products will sell. If you forecast unusually high sales and profitability, it indicates that you don’t have a realistic understanding of your own business and the market that you are in.
2. Relying On One Client Or One Product
That one client or one product might be enough to get your new business off the ground. But having only one certainly won’t be enough to keep your business growing. Therefore, you must constantly be trying to add a variety of new clients and new products. It is safer for your business to have many little clients instead of one giant client. Ideally, you should be striving to bring in a variety of clients of different sizes and industries. And, you should also be developing a variety of products that can be sold to a variety of clients in different industries. This variety is what will save your company when market conditions and consumer behavior changes.
3. Not Having A Unique Selling Point
Why will your customers buy your service or product? Why you? Why not someone else? What are you offering that makes your services and your products special? What do you bring to the table that the others don’t? You better have a good answer to these questions before starting your business. Most businesses start up without ever asking these questions. That’s a very big mistake. If you want to build a successful business – one that you can be proud of – then you must answer these questions before you start your new business.
4. Not Doing Enough Marketing
You can never do enough marketing. As a small-business you will be marketing yourself as much as you are marketing your services and your products. It is not uncommon for a small-business to devote more time to marketing the owner, and building relationships, than to actual sales. This will help you to make a positive impact on your customers, and potential customers, and help them trust you and remember you.
5. Lacking Proper Start-Up Capital
You must expect that your start-up costs will be much more than you initially planned on spending. A one-person small-business might have little or no start-up costs. This type of business can become profitable immediately. But if you are going to need an office, machinery, employees, supplies, etc., your start-up costs can easily soar past what you initially planned on. And if you don’t have enough capital to pay these start-up costs, you will be prevented from getting past the break-even point for profitability.
6. Avoiding And Fearing Risk Too Much
As entrepreneurs we naturally try to avoid uncalculated risk. We generally only take risks that have been well thought out. But we should not avoid or fear all risk. The real issue is that without taking risk, you cannot exploit opportunities that come to you. You can very simply live a quiet and reasonably happy life, but you are unlikely to create something new, and you are unlikely to make your mark on the world.
7. Being A Control Freak
This isn’t an issue if you are a one-person business. But as soon as you start working with others, like partners, spouses, employees and sub-contractors, you need to share the decision-making power. As the owner of the business you will certainly have the last word. And as the owner your overall vision is what is the most important. But you need to convey your vision to everyone else that you work with, so that you are all on the same page. Getting others involved in your decision-making process and collaborating on ideas will make your business much stronger.
8. Not Anticipating Your Customers’ Needs
Anticipating what services or products your current customers will need after your initial sale can greatly increase your company sales. It will also create a greater bond between you and your customers. Let’s say for example, that you install HVAC systems in residential homes. You can easily return 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 be grateful that you take good care of their system and keep it running perfectly. They get to see you in person and chat with you. You ask them to please give your business card to anyone looking for HVAC work in their home. You get to keep your customer happy, make an emotional connection with them, and go home with an easy $200. If you didn’t come back every Spring and Fall, the customer would need to find someone else to take care of their HVAC system.
9. Believing The Flexible Hours Myth
Starting a business will take up a huge amount of your time. Even if you start a small, part-time business, you will expend a lot of time and effort to get it going. But the more time and effort you put into it, the more you will get out of it. Therefore, you better choose a business that you love to work on. The more that you like what you are doing will make it much easier – even make it a joy – to be spending so much time, effort, and money, on building your business.
10. Ignoring Your Customers
This is a big problem for all businesses. But as a small business one of your biggest selling points should be personalized service. There is always another business desperately trying to take your customers. The minute 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 must find ways to create an emotional connection between your company and your clients.