An entrepreneur is a person who takes an idea, product, or service and does whatever is necessary to introduce it to the marketplace where it can produce revenue.
For I believe, it is someone who is a risk-taker, a believer, a hard worker, an initiator, a challenger, and a driver. Someone that creates something new.
A person with these qualities can think of himself as an emerging entrepreneur, but the main problem arises when the entrepreneur thinks of starting something new but lacks the right direction and make some common mistakes.
According to the data provided by the U.S. Bureau of Labor Statistics, 20% of new businesses fail during the first two years of operation, and roughly half of all businesses don’t survive past the fifth year.
Every entrepreneur makes a few business mistakes, be it a newbie or a professional. Sometimes, it is due to less experience, an exhausting idea, not having the required funds, and a lack of correct knowledge. But, the exact reasons why do startups fail always remain unknown to everyone. Here, under this topic we will cover some mistakes entrepreneurs should avoid doing.
Table of Contents
1. Fear of failure-
The inevitable side effect that every entrepreneurship has to face is “failure.” Most of the thriving business persons have felt the taste of failure. Every failure you face on your way to being an entrepreneurship leads you to success. Most of the successful businessmen have experienced failure.
The above quote is from one of the leaders and magnates that clearly explains that failure is a part of success.
We all have heard the phrase ‘Failure is the key to your success’, but despite reading countless available articles on the internet; we as an entrepreneur get stuck with the frightful thoughts of getting failed because deep down, we all know that launching a new business is not that easy.
Every time an entrepreneur thinks of the commencement of a new business, the fear of “what if’s” leads to many different questions starting to whirl in his/her mind:
- Is my idea worthy enough to share with the world?
- Will people pay for my products and services?
- Will I be able to make enough money out of it?
- What if my startup fails?
Indeed, it is fine to have these questions in mind, since when you put every one of the endeavours and all that you have, your cash, your thoughts, your expectations, everything, and it is without a doubt harmful when all gets broken.
But, above all, remember that you need to get out of somewhere to reach somewhere else, and with having fear in your mind, you will not be able to get out of your shield zone. You need to get out of that comfort zone to emerge as a great entrepreneur.
Try not to feel terrible, even if your app startup fails. Accept it as an analysis as opposed to accepting it as a disappointment. By changing your mindset in this direction, you can learn from your mistakes, which will help you to re-work your startup or flourish in your next business.
2. Lack of time spent on researching about the product-
Researching is a particularly important process in product persuasion and product development. Avoiding this will lead you to nowhere but into a trap.
Market research and analysis are necessary when setting up a new business. You should understand the kind of person who wants to be a customer and organize your marketing aims to attract those.
There are many cases of marketing and customer research that are deviated from the basics. So, if you have eminent customers or are commencing without them, it is critical to know from where they are coming and who they are. It is important to enhance your efforts and success rate.
3. Market Fit Product-
“Founders fall in love with their ideas and often don’t do the hard work needed to figure out exactly who else is in love with what they are selling.”
Of course, you should be passionate about your business, but founders who are too emotionally invested often ignore the warning signs that they’re missing the mark. Remember that if your product or service is not getting traction, it’s not the customers’ fault — it’s yours.
Market fit product means that there are people who need what you’re making. And for the market to want your product, it has to solve a real problem something important enough for people to be willing to open their wallets.
Most of the failed startups are victims of the lack of market fit. Sometimes, a wrong idea can be related to offering a demand-less product to the customers. Sometimes it can be a lack of innovation or lack of audience understanding and others. These are one of the biggest causes of why startup businesses fail.
It is important to understand your market and target audience. They fail to understand what are the needs and wants of the market and the people, which will make them their customers.
4. Wrong focus-
Many start-ups run into this problem because they can’t ever seem to define themselves and what they offer. You have to try and zone in on and focus on the most critical product or service that you know will sell. When you move around too much, change your business goals, and constantly pivot, you’re not in start-up mode, you’re in brainstorming mode. Don’t build a business in hopes that something will suddenly catch on with your potential clients. You may have a great idea, but you must understand the needs of the market and how you can solve those problems.
Numbers of new entrepreneurs have often failed because they were not genuinely interested in the business; they were more interested in making money. They Treat Their Businesses Like a Magical Money Vending Machine.
There are many great ideas you can latch on to, but the key in business is to make sure the idea of the central theme or mission of your business venture can attract customers and generate sales and profits. A great idea in and of itself is not enough to start a business. It is important to understand that profit is not a quick step but the main aim should be to getting customers and settling in the market and start with these steps because you will be spending a lot of time on it.
Many business leaders, executives, and management consultants would say that success largely depends on attention to detail.
In other words, we are hungry to achieve, but yet should be patient with our learning. And it’s this mindset you should have when building a business.
You don’t simply “get it” on your first go. And it takes a lot of practice, trial, and error, and learning from previous mistakes to get us to our goal of making money!
5. Failing to make marketing as a priority-
Many new entrepreneurs start their business by focusing only on the product, without determining their target, niche, and demography first and as a result, have failed to attract any clients. Marketing should be one of your top priorities. Devising a marketing plan will help you determine how to promote your products or services and create a system that will generate more clients for your business.
As an entrepreneur, your goal is to make money. And to do this, you need to be good at two things.
But a lot of people tend to cut corners with this. They don’t put a lot of energy into their ads, product descriptions, or landing pages. And then wonder why they struggle to make any sales.
“If you build it, they will come.” This is a common belief (sometimes consciously, sometimes not) among new entrepreneurs, but you can’t expect your customers to spot you on their own. The more effort we put into sales and marketing, the more positive our customers were toward our product.
6.Making Poor Hiring Decisions-
Hiring decision is one of the most important choices you’ll ever make. It’s time to stop thinking about your job candidates’ qualifications as they are reported on paper.
Entrepreneurs in search of new hires also need to consider their existing team’s collective intelligence to create a diverse balance of creativity, empathy, logic, experience, and skill. Hiring the right people is crucial for the success of your business and that’s why entrepreneurs should have a formal hiring process in place when looking for new staff.
By putting time and work into finding the right people, you will improve your chances of hiring the best performers and avoiding costly and painful mistakes.
Many entrepreneurs have good instincts about whether someone is right or not for the job. But you shouldn’t rely just on gut feelings. The recruitment decision should be founded on solid, objective factors.
7. Lack of proper financial plan-
Handling money incorrectly and being irresponsible with cash flow is a death sentence for startups with limited access to capital.
If you are not managing your finances, your business can crash down like a house of cards. You have to spend really wisely hiring a financial advisor can be really helpful in avoiding financial blunders.
So, this are some of the commonly mistakes that an entrepreneurs should avoid doing in their business.
One should work keeping the following points in mind, which will lead to fewer chances of failure or mistakes happen.