Many people who start their own business do not realize how much work and time will be involved. They fail to carry out any primary research and as a result become quickly overwhelmed. Perhaps the first question to ask yourself then is whether you are in fact ready to start your own business. Do you have an entrepreneurial mindset? Are you committed to spending all the time you need to succeed? And are you ready to take massive action?
At first, you will have to wear many different hats; you will be the CEO, the general manager, the accountant, the salesperson, the computer technician, the secretary, the receptionist. You must therefore prepare yourself because there will be days when you are disappointed, depressed, or frustrated. You have to realize that success will not happen overnight. And it may take a year or two before you achieve your expected results.
To avoid these disappointments, here are ‘The 12 Most Common Mistakes New Entrepreneurs Make & How to Avoid Them’:
1. Failure to Spend Enough Time Researching the Business Idea to See if it’s Viable
Numbers of new entrepreneurs have often failed because they were not truly interested in the business; they were more interested in making money. It is important to start something that you really like, because you will be spending a lot of time on it.
Your assignment – Spend all the time you need working on your business plan, which should include: your mission statement, your business strategy, research on your target market (demographics), industry analysis (size, economics, trends, success factors, challenges, etc.), your marketing plan, your financial projections and sales.
2. Failure to Determine Whether the Business Actually Adds Value
The most sustainable businesses, those that withstand the test of time, provide value by performing a service that people need.
Your assignment – Make sure your products or services provide value and benefit to your clients. Be ready to solve any business problems that your clients may have.
3. Failure to Gain a Complete and Total Understanding of the Business
Every business has drivers, hot buttons and key levers. What drivers exist in your business?
Many business leaders, executives and management consultants would say that success largely depends on attention to detail.
Your assignment – Understand all the aspects of your business, and of particular importance, know how to present them in an easy and simple manner.
4. Failure to Describe the Business in Only One or Two Sentences
No doubt you’ve experienced the entrepreneur whose business is so technical or complex that he cannot explain the concept in plain English. Or, it takes 20 minutes to convey the purpose of the business. What value or benefits does your business offer?
Your assignment – Have an efficient 15 to 60 second elevator pitch that introduces you, your business’ mission, focuses on the benefits you provide and makes you and your business memorable.
5. Failure to Conduct the Primary Research
There are many great ideas you can latch on to, but the key in business is to make sure the idea—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.
Your assignment – Take the time to gain experience, study the business, understand what makes the business work (how to serve the customers and generate profits) and what leads to losses.
6. Failure to Contact Professionals Who Can Help You Get Started
Numbers of new entrepreneurs ask their friends and family for advice when starting a new business. The problem is that they often ask people who have never started a business; so in reality, these people are not in a position to offer sound advice.
Your assignment – Get a mentor or two. Surround yourself with experts who possess skills and expertise that you lack. Team up with professionals who can complement your strengths and cover for your weaknesses.
7. Failure by Underestimating Financial Requirements
Do you know how much capital you need to start your business? Do you know the market, did you calculate your cost, did you project your sales, do you know the number of clients you need? Do you know how long it will take before you get your first benefits or before you will run out of money?
Your assignment – Invest the time to work on ALL aspects, especially the major ones, of your business before you start.
8. Failure to Make Marketing a Priority
Many new entrepreneurs start their business 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.
Your assignment – Dedicate a good portion of your time and energy to working on and implementing your marketing plan. Set up a meeting with yourself once a week to work on your marketing plan and whatever happens never cancel this meeting; it is essential for your business.
9. Failure by Under-budgeting the Marketing Costs
Today the world is overcrowded with businesses and probably a number of those in your market perform essentially the same functions as you do. This means that you must differentiate yourself from them by making your business stand out. Publicity is essential to your livelihood; otherwise, you will not attract any customers.
Your assignment – Make sure you have a strategy that puts the word out there. Provide adequate publicity, business cards and marketing materials that project a professional image. Don’t try to save money on these; they are reflecting your business. A cheap business card or flyer will not make a professional impact.
10. Failure to Focus on the Business
Many new entrepreneurs are energetic and enthusiastic people (which is essential to success), but they can also be overly optimistic and pursue too many targets and directions at once. This typically results in mediocre results. Define your business’ mission as succinctly and narrowly as possible. When you move in too many directions at once, especially in the early days of your business, you are likely to fail to execute anything correctly; so you end up working “on the business” instead of “in the business.” In other words, you will spend all your time operating each task on your own. You won’t have the time to sit back and decide on the best way to develop your own marketing plan, create new products, or improve your services.
Your assignment – Know your goals. Put them in writing. Make sure they are realistic, specific, and measurable and that you set yourself a deadline to achieve them.
11. Failure by Over-Marketing
Once you have developed your product or service and have perfected your offering, you may think that your offering is the best in your marketplace. But unfortunately, to be efficient you can’t sell to everyone. You need to select a specific target market and stick to it. By doing this you will have a more efficient message and will more likely achieve success much sooner.
Your assignment – Carefully determine your niche, your demography, your ideal clients, where they go, what they read, what their hobbies are, etc. Once you have a full understanding of your client’s profile you will then have a full understanding of how and where to find more of them.
12. Failure to Follow-Up with Clients
Many new entrepreneurs are often so desperate to constantly find new clients that they neglect the clients they already have and in fact end up losing business. Statistics show that it takes seven more interactions to secure a new client than to sell more to a repeated client. So develop and maintain a useful and organized follow-up system to offer new services to your clients and don’t let them slip away.
Your assignment – Constantly and consistently communicate with your current clients. Start a newsletter, offer special sales, create new products to upsell, join affiliate programs if you don’t have your own products. People who have already bought from you will appreciate it when you recommend other products. Statistics show that up to one out of three clients will take advantage of this new offer. It is essential to build a very, very special relationship with your clients. They are your best audience.
Eric S. Degen, CPA Titan Accountancy, LLC