Step into an entrepreneur’s shoe, it is like being omnipotent; you evolve into a hybrid, all-powerful entity destined to monitor every business aspect. Well, that diversity may seem glamorous, but it is arduous to manage it all. The weary load of responsibilities makes it inevitable for mistakes to happen. While some blunders are acceptable, there are others which a startup cannot stand to bear.
- Financial Mismanagement
- A faulty attitude
- Not employing technology or seeking professional help
- More planning, less implementation
- Prioritise Requirements
- Setting unrealistic goals and towering expectations
- Don’t expect quick results in less time
- Faulty hiring decisions
- Not keeping up with the craze
- Inadequate marketing efforts
- Surface understanding of target audience
- Failure to do competitor research
- Letting criticism affect you
- Leaving networking opportunities untapped
- Insufficient or no branding
As you set forth on this journey to be the mastermind, leading people to shape ideas, here is a list of commonly-made entrepreneurial mistakes to avoid.
1. Financial Mismanagement
Out of all the mistakes entrepreneurs make, poorly managed finances tops the list. To put it vaguely, funds drive the show, and with their rippling nature, it becomes mandatory to govern them. With a subpar money management, you may go wrong in these ways:
Spending all of it
One of the biggest financial mistakes you can make as a freelancer is spending every last penny you have. While you may be tempted to invest all your money into the business, expecting ROI but ploughing in all of it is not a good idea. Keep something aside for a rainy day.
Rule No. 1: Never lose money. Rule No. 2: Never forget rule No.1.- Warren Buffett, Business Magnate, Investor and Philanthropist.
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Being too thrifty
Your business cannot survive if you are overly picky about where you spend your money. While you must wisely choose where to spend, being too skimpy will be counterproductive as it can lead to frustration, slow decision-making, and execution.
Happiness is not in the mere possession of money; it lies in the joy of achievement, in the thrill of creative effort.- President Franklin D. Roosevelt
Not keeping a track of where the money goes
A rule of thumb for managing your money is knowing where all of it actually goes. Being unaware of where your money flows is a pitfall. It is detrimental to your financial management. This attitude towards money management is harmful, especially for a startup.
Money, like emotions, is something you must control to keep your life on the right track.- Natasha Munson, author, inspirational speaker and CEO of Be Magic, Inc.
Expensing it all near tax deadline
Buying things like equipment for your business is good. Buying things for yourself is even better. Buying things for yourself and chalking it up as a business expense is not okay, not to mention illegal. It is the end of a tax cycle, and you realise that you have upcoming expenses, plus a big tax payment to make. Of course, the temptation to want tax returns on personal expenses is high. But apart from being illegal, this can potentially affect your general approach to business. The biggest advantage of your business being a separate legal entity is that it gives you the ability to think objectively & practically. So, it is best not to treat your expenses as a business’ expenses.
The difference between tax avoidance and tax evasion is the thickness of a prison wall.- Denis Healey, British Labour Party politician
Not knowing when it’s time to shut down
A foul blunder all startups make is that of not knowing when to pivot or shut down the company. Analyse your standing in the market, take into account all your efforts and calculate your customer base.
As a business owner, running an unyielding company will drain you of your financial assets.
It is always important to know when something has reached its end. Closing circles, shutting doors, finishing chapters, it doesn't matter what we call it; what matters is to leave in the past those moments in life that are over.- Paulo Coelho.
2. A faulty attitude
Nobody likes a know-it-all and businesses detest it too. As a new entrant to the world of entrepreneurship, a learning attitude will be super useful. Since you are largely going to manage all domains, it is crucial to gain knowledge about each. Read, practice, experiment and gather knowledge about what makes each field unique. It is only then that you can advise, innovate, evolve, or make informed decisions. Get off from your high-horse every once in a while, and seek wisdom from experts. Moreover, trust the professionals you hire to do their job. Learn from them if you get the opportunity.
3. Not employing technology or seeking professional help
In today’s tech-savvy age, it is a big mistake not to use technology. These technological aids in the form of tools make processes much easier, more streamlined and very fast. A good example of how technology helps make tremendous progress is the usage of AI in healthcare. It has successfully aided in patient and drug discovery, and the formation of standardised tests. A big entrepreneurial blunder would be staying aloof of the many advantages of technology.
Sometimes help is all you need to get out of a rut. Don't be afraid and ask for it! Look for professionals in your domain, reach out with a query and get free/paid assistance for some quick problem-solving.
4. More planning, less implementation
Starting as an entrepreneur, it is crucial to spend time doing market research and in-depth groundwork. While you may have it all planned with those Excel sheets in place, slow or inept implementation will be evident in low bars in your performance charts. All that strategising and planning will be worthless if the execution is slow. Therefore, a proactive approach is required. But this should not hamper the analysis part as well.
5. Prioritise Requirements
As an entrepreneur, it’s easy to get lost in developments and lose sight of your original priorities. You are likely to come to realisations, through people or otherwise, that you’re deviating from your priorities. In such cases, it is important to head back to the drawing board and remind yourself of what is important. After all
If your priorities aren’t met, you’re probably just barking up the wrong tree. So you just have to nip your problems in the bud.- Jacopo Lai, Co-founder, KoolStories
6. Setting unrealistic goals and towering expectations
Your idea may be totally novel, and it may sure have the potential to blow up the market, but setting unrealistic goals is not the right way to go about it. Set attainable long and short-term targets for yourself and your employees. Remember that small victories serve as motivation. Since goals give direction to your efforts, it is better to walk with small steps rather than take long strides that are wobbly and tougher.
7. Don’t expect quick results in less time
Some entrepreneurs make the mistake of being too unrealistic and impatient. From this stems the greed for faster results with minimal effort in less time. This makes small businesses and startups more vulnerable to fall for shortcuts and quick hacks. As a new businessman, clutch to the rule of thumb- nothing replaces hard work. Imbue your workplace culture with this mentality and don’t make the mistake of expecting too much.
8. Faulty hiring decisions
Your human resources are the flesh and bones of your business. You automatically come into a relationship with every employee you hire, and well-trained people become an asset. Hence, always go for competent people. Don't onboard low-costing people who are unskilled, for the sake of cost-cutting. Find the best fit and be extremely careful while hiring.
9. Not keeping up with the craze
Since you want people within a market to purchase and actually like your product, your marketing efforts must align with current trends. Therefore, you need to keep up with everything that is doing rounds. Knowing what people are responding to on social media or following in society will give a peek into their tastes. Accordingly, shape all your efforts around these preferences to be more relevant.
10. Inadequate marketing efforts
Your business services may be the best, or your product may be wholly new and utilitarian. But nobody will come to know about it until you spread a word about it. This is where marketing comes in.
Business has only two functions — marketing and innovation.- Milan Kundera, Writer & Playwright
Your business ought to have the right marketing team and strategies like PR, advertising in place to craftily tailor and deliver your message to the target audience. After all, marketing helps you make some noise and gives recognition to your startup or small business.
11. Only a surface understanding of the target audience
Since marketing takes your business across borders, it is necessary to choose the marketing strategy that suits you best. This begins with a knee-deep understanding of who your target audience actually is. You cannot aimlessly hit a crowd anywhere in the world. Even if you plan to launch a global platform, it is essential to choose a geographical area or market. Ergo, you need to know your audience. This begins once you have clarity on the utility front of your product or service. Ask questions like, “Who will benefit the most from my service or product?”, “What age group is more likely to make a purchase?”. To further simplify this process, build buyer personas and curate content, or commodities to give direction to your marketing activities.
12. Failure to do competitor research
It’s important to remember your competitor is only one mouse click away.— Douglas Warner III, Former CEO, J.P. Morgan Chase & Co
You can genuinely use your competitor to see if you are on the right track in the business world. It is a technique in SEO and a leading contributor to generating more customer leads. In the end, the idea is to do all that your competitor is doing, probably do it much better and then go two steps ahead by doing something innovative.
13. Letting criticism affect you
The biggest entrepreneurial mistake is taking criticism of their heart or ignoring it altogether. Understand that criticism is veiled feedback. So, get into the practice of taking criticism in your stride and use it to bring about positive changes. Once you start analysing the criticism you get, it makes it easier to identify the problem-parts in your business. Also, throw in customer reviews and feedback to the mix for an errorless strategy building.
14. Leaving networking opportunities untapped
As much as marketing aids to generate a buzz, never underestimate the power of networking. Every time you step up and deliver a pitch about your business, it adds to your confidence and exposure. While networking with professionals requires specific skills to plant a business card and make yourself visible even after you have left. Find or generate every chance you get to build the right connections.
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15. Insufficient or no branding
Think of a men’s grooming brand that did not exist for all 20-somethings ten years ago, but had everything to do with class and appearance among men of all ages in the 70s, 80s and a bit of the 90s. A distinct fragrance that makes one “Smell like a man, man”. Ring a bell? Yeah, we’re talking about ‘Old Spice’. What brought it back from the brink of non-existence?
A new series of advertisements featuring traditionally masculine personalities appealing to the opposite of the target demographic (men), turned the brand image back on its feet.
Old Spice stuck to old messaging that targeted a wide range of audience including millennials- about 30-40 years ago. The brand’s refusal to evolve the messaging brought it to the brink of extinction, and now it is thriving. Truly a branding story to learn from.
Entrepreneurship can be a daunting journey. It takes some drive to pursue it, and even more to power through a series of failures, just with the determination and with very little assurance that hard work will pay off. Now, while there’s no guarantee that a particular set of solutions will help an entrepreneur be successful, avoiding at least some of the abovementioned mistakes can certainly make your life easier.