8 Devastating Mistakes to Avoid as an Entrepreneur
The thought of being an entrepreneur is very exciting. And if one were to actually embark on this journey of escape, one must be ready for the challenges ahead.
Growing up, we have all heard the phrase, “Make mistakes, don’t be afraid of them, you will only learn from your mistakes“. This is true in most cases. One of the reasons why they say, experience is the best teacher.
When we start doing something new, we tend to make mistakes. Every successful business owner made mistakes at some point and still making. We learn from these mistakes. This particular knowledge cannot be taught. They have to be experienced.
However, there are a couple of pointers that can be taught, talked about and precautions taken for.
Below is a list of devastating mistakes you could avoid to have a successful and long-running business.
Devastating Mistakes to Avoid as an Entrepreneur
1. Not having a clear vision/goal
Being an entrepreneur sounds fun, exciting and even empowering. There is nothing like the feeling of being your own boss. However, you the entrepreneur must know exactly what the vision for your business is? If you think, well, it will hit me along the way. Well here’s news for you, if it has not hit you yet, it will never hit you.
An entrepreneur must always know what the business will be about. Not just know it, but have a very clear definition of what exactly the business will do and how they will do it.
The one way, to cover all your bases, is to make a business plan. A business plan will assist you in figuring out the areas you need more clarification on and give you, not only a holistic idea, but also an in-depth knowledge of your business, and its activities. This business plan will also provide a crucial supporting document with banks and investors. Learn how to create a business plan.
2. Not understanding the heartbeat of the market
Once you know exactly what your business is about, search for your target audience. Around 65% of new business start-ups have short term life because they misinterpreted the market.
Before you make your business plan, go out into the market and understand the different prices. Get to know your supplier’s rate and the going rate for your product etc. These pointers help you present approximate costs in your business plan. This costing will prevent the overestimation and underestimation that you may tend to make. For example, if you plan your business startup in Dubai, do not assume rates to be expensive. Do a thorough research of the market; you never know of the hidden gems if you don’t go searching.
A good entrepreneur understands the market well, identifies the actual issue and is able to find an opportunity within that problem.
Understand the pulse of the market and let your business beat to that rhythm.
3. Learn how to delegate and avoid micromanaging
Yes, it is your company and nobody might have the same commitment and love that you have for your business setup. Well, here’s a thing, there are people in this world who might be able to do a better job, than you.
Delegation of work enables you to focus on areas of your business growth. That is a part, that only you can do. Distribute your work accordingly to people and enjoy your work.
Another part you need to be careful about is the micromanagement of your team member’s work. You delegated the work, it is now their duty to do it well.
Control yourself, when you feel like, taking it from them and doing it yourself. Remember, they will only be able to help you in the future, if they know what they did differently.
4. Hiring the right people and firing slowly
Every business needs human resources to move forward. Most entrepreneurs hire slow and fire fast. However, the contrary is accurate. As your business starts, hire individuals you think would be a great fit. If unfortunately, they do not do well, try teaching them, the right way. If they are causing more harm than good, well, then there is no point in keeping them in your organization.
However, the right way to go about this would be trial and error. Once you understand the traits you are looking for within the right people for your organization, just wait for your organization to blossom into the successful business setup you always wanted it to be. You should also look into how you can optimize HR department and keep your employees happy.
5. Inability to manage your finances
Entrepreneurs, who decide to start an organization, without a business plan or just decided to start a business on a whim. That my friend is a recipe for a disastrous ending.
Get out into the market, learn about the different rates. Negotiate deals and understand the market. Make notes and refer to them while making your business plan.
Among the costs that you need to focus on, working capital is the most important type of costs.
Working capital ensures the smooth day to day operations of your business. An entrepreneur must be fully aware of his working capital situation and must be smart with his finances.
For example, there are free zones in most countries, that facilitate easier, smoother and faster business set-ups than in traditional settings. Free Zones like DAFZA and JAFZA offer a lot of benefits for entrepreneurs. Find hotspots like these for your business setup.
Spend smarter and be wiser.
6. Creating presentations
This is a place where most entrepreneurs tend to lack. If your business needs investments, you make presentations of what is, what could be and recommendations. The same old boring system.
You are an entrepreneur with an idea that could perhaps change the way we live. Strive away from the old tried and tired ways of presentations. Give your investors a real taste of your product or service.
Develop a prototype and show them your ideas. Prototypes, help people understand the gravity of the situation or understand fully what the product entails.
They could even contribute ideas for the product, that you never thought of.
The simple saying here would be, “work smart, not too hard.”
7. Treating your business plan as your holy grail
The above points have one thing in common. That’s the importance of a business plan. Here’s the twist. Your business plan is supposed to be your blueprint for your business setup. View it more like a foundation with guidelines.
Once the business is set up and running. Maybe in a year or so (or according to market and business conditions), expand your business and diversify. Do not hold on to your business plan like that is the ultimate goal.
The business plan is simply the starting point for a successful business venture. Every business, in order to thrive and grow, requires to expand itself. In order to expand the business, it is necessary to diversify. However, expansion does not mean simply going after what you want. Update yourself on the market needs and demands. Do your research and then expand.
8. Focusing too much on social media
Last point in this blog, is a little lesson from digital marketing. Often businesses, feel, social media is all it takes and it is the only platform to focus on.
However, due to this, a world of digital marketing tools are being missed out. Tools that could give your brand reputation and take your business to the next level. If as an entrepreneur you are not familiar with the digital marketing world, hire an individual that would know about the different types of functions to put your organization on the map. This would also allow you to learn digital marketing along with focusing on other areas of the business.
Another side, that is often missed out or neglected by entrepreneurs is email marketing. Email marketing has a certain impact on most consumers. Targeting the right audience could bring forth benefits, you never saw coming.
As we come to the end of this blog, here are some take-homes.
The eight points mentioned above gives you a brief idea on the most elemental factors you need to look out for before you set up your business.
However, you must keep in mind that these are simply a few of the many important factors you need to look out for before you venture out into becoming an entrepreneur. Very important is the fact that you need to have your business insured. Insurance Asset Management firms will help you reduce the risk of losing your business in case of any eventuality. An entrepreneur by definition means a risk-taker, innovator and problem solver. Due to the general theme of entrepreneurs being daredevils, aspiring entrepreneurs think that to be an entrepreneur, one has to be taking risk. Well, this is partially correct. Being an entrepreneur means taking calculated risks. One can only take calculated risks if one is fully aware of the market conditions, their product, competitors, who the customers are and other relevant factors.
Being aware of the problems that could arise, makes them excellent problem solvers. One must keep in mind, not all problems can be solved with plain market knowledge. Some mistakes might just be an opportunity.