The road to starting and building your own business is a minefield with possible mistakes at every step, believe me I know.
One wrong move, one wrong partner or contract, and everything could come crashing down around you.
Since most entrepreneurs tend to be “all in” when it comes to starting a business, if you are considering taking the first step perhaps you should pay attention to the following list of the five most common mistakes that entrepreneurs make and how to avoid them.
If you fall into any of these traps, it could spell the end of your business.
1. Picking the wrong business partner(s)
Even though it may sound like a great idea to start your own business with your best friend, you have to consider your friend’s qualifications. The person may share the same passion for the idea that you have, but if they have no idea how to run a business or frequently mishandles their own money, you should not invest your capital or time with them to get a business off the ground. On the other hand, if you find a potential partner who has all the business skills in the world behind them but you cannot get along with them, you should avoid partnering with them as well, confrontation will do nothing to help your business get off the ground. You need to find someone who is fully aligned with your own vision for the business and has the best of both worlds: skills and personality.
2. Losing sight of your market
It’s true that the larger your market is, the greater your sales are going to be, simply because of the laws of supply and demand. But if you try to please everybody, you are going to lose everybody. If a product is so general that you cannot pin down who it should be sold to, you will not know who to pitch to. Also, pitching to the general public takes away the sense of exclusivity need that niche products provide and consumers love. Know who you are selling to for optimal success.
3. Not knowing how to budget
If you run out of money at any point in your business startup, that is a pretty good sign that your financial future is not too great either. A successful business owner will be laying down budgets from day one, in addition to finding ways to make money stretch. You need to realise that you need to always have some sort of financial cushion, because an emergency can strike at any moment. In that case, if you do not have a contingency plan to fall back on, your only option could be to shut your doors.
4. Not staying in touch with your customers
If you don’t gather feedback from your customers, especially in the early phases of your business, you will not know what is working for you and what is not. If sales start to dip down and you do not know why, it could take time that you do not have to turn the ship around. Getting feedback means that you will have a pulse on your business, and will know exactly what adjustments to make to better it.
5. Getting too emotionally involved
Your emotions are obviously going to be a driving factor in your business, as the passion you have for the idea or solution is going to be why you start it in the first place. But if you get too attached to what you are doing, you will be more susceptible to micro-management. The ability to take a step back and look at the bigger picture is something you need to posses if you want to remain nimble enough to outwit your competition.
There are of course many more potential pitfalls out there just waiting for the naive or unwary entrepreneur. My advice is to seek the advice of a Business Mentor to help you chart a course through the minefield, especially if they understand your business sector or have been there before.
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