Entrepreneurship is one of the most crucial factors which drive growth and development. It enhances the standard of living in an economy. Entrepreneurs are the people who take the risk and enjoy rewards and stimulate innovations in the economy which leads to growth.
Yet, like every other human being, entrepreneurs are prone to making mistakes, according to the latest research by the office of advocacy, 22.5% of businesses fail in the first year, and according to a data by CBinsight, the most common reason for a startup to fail is the absence of market need for their product or service(42%), followed by next big reason which is lack of funds(29%).
Many of the reasons a business fails can be reduced to a great extent. It requires careful research in the initial phase of the business. I will list a few mistakes which an entrepreneur should avoid making at an initial stage to improve the chances of success.
- Thinking you know it all:- You are very exhilarated about the idea to start your own business, which you want to accomplish desired results and give good returns, and you might be sure that it will work. However, one of the most common mistakes we make is not researching well about what we want to start. What we start will stick with us for a very long time, but many people looking to start a new business know little about the industry. It can lead to us getting into trouble further. Many crucial factors give us a better understanding of the industry we will step in such as competitor analysis, profit margins of that industry, demands, work-life balance, distribution patterns, location, etc. So, if you are looking to start a business from scratch, it’s always a wonderful idea to avoid rushing and do good analysis about the industry that you want to step into.
- Create a wonderful plan:- According to Antoine de saint-exupéry “a goal without a plan is just a wish”. Planning is one of the most crucial factors which adds to the success of the business, it helps to identify the future goals of the business and explore various ways through which you can achieve them. It helps to discover alternatives for accomplishing the same goal and select the best feasible alternative with the lowest risk and best return. Apart from establishing goals, planning also helps to reduce unnecessary wastage of time, effective and efficient utilization of resources and reducing uncertainty. So, If you are looking to begin a new business or already working on a project it would be a good idea to equip yourself with a plan.
- Making awful hiring decisions:- Hiring decisions are very important for a company especially when it is for a new startup. Making an excellent hiring decision in the beginning not only helps us to set a strong base but also strengthens our position in the long run. Normally, people tend to hire people with low skills and expertise to save some expenses. However, in the long run, it does not benefit us because of the competitive nature of the present market. If you are looking to set a strong foundation for your startup and you want it to do well in the long run, there are several factors we can take into consideration before making hiring decisions, hiring part-timers instead of full-timers and focusing quality over quantity are some of them.
- Expecting that customers will find you:- It is one of the most common mistakes that new entrepreneurs make. Expecting customers to come by themselves is not going to work in a highly competitive world like ours. Therefore, it is very important to market our products well so that customers can know about our business. When marketing is properly done, it can reap many benefits for example increasing brand visibility, developing lasting relationships with the audience, creating trust and loyalty, and boosting sales.
- Learn from your mistakes:- One of the biggest mistakes that are often overlooked is that we simply don’t learn from our own mistakes. Entrepreneurship is all about learning from your mistakes after all. Every one of us makes mistakes in our life at some point here and there and it is not exclusive to anyone, but we can rectify our mistakes only when we can learn from our mistakes. When we understand our mistakes and work on correcting them then only we can reduce the chances of repeating them and develop wisdom which can be valuable for solving problems and making rational decisions.
- Don’t underestimate your spendings:- Underestimation of business expenditure is one of the major budget flaws and can be one of the main reasons why you shouldn’t rely solely on heuristics. Various costs like product development, maintenance, repairs, hiring costs, and advertisement costs are the ones where businesses are likely to underestimate. When it comes to expenditure, instead of going with what we call “at least” we should rather go with “at most”, which is better suited in almost all of the circumstances. Overestimation of business expenditure helps to avoid unexpected and unanticipated costs and helps to prepare better for the future.
- Don’t be impatient:- Arnold H. Glasow once famously said “The key to everything is patience. You get the chicken by hatching the egg, not by smashing it.” His thoughts are as influential even today as they used to be. New entrepreneurs want their efforts to reap reward very soon or we become impatient and often frustrated. They make decisions and change them very quickly when they don’t meet expectations for a given time. What is often overlooked is, good things usually take time and perseverance is an ability that sets you apart from all other businesses. We all need some time to evaluate and restructure our thoughts and here’s when patience comes into play, it improves the decision-making ability of a person, builds reputation, and helps us remain focused on long term goals.
- Not taking feedback seriously:- “There is always space for improvement, no matter how long you have been in the business” are the lines said by Benjamin Franklin. Customer feedback is a very essential part of any business, it helps you to know whether you can meet customer expectations. It’s another big mistake that new entrepreneurs make by not listening to customer feedback over time. You will able to sell your product or services only when you fulfill customer expectations. Customer feedback helps you understand the requirements of the market and highlight the strengths, flaws in your product, and real experience of customers, so you can improve them while decision making. Feedback can improve performance to a great extent when it is taken seriously and worked on to enhance the customer experience.
