Common mistakes of a first time entrepreneur
Being an entrepreneur is facing risks at every step, be it in developing a replacement product/service or successfully bringing that product/service to the market. this text deals with a number of the main mistakes that new entrepreneurs make which end in their cherished business venture turning into a failure.
The thin line between success and failure
Annually countless energetic, smart and positive minded entrepreneurs take the leap of religion and open their new businesses with the hope, that their product/service would help in bringing alittle change to the planet , and within the process turn their businesses into successes. But sadly, most of those entrepreneurs face failure; some even before their venture flies . Agreed even after taking every possible precaution, the result of any new venture can't be guaranteed. Still, the subsequent are a number of the main mistakes that first time entrepreneurs commit. Let’s check out one at a time.
No formal business plan
There is a crucial saying ‘when you fail to plan, you're getting to fail.’ Many new entrepreneurs avoid making a business plan as they find it time consuming and requiring tons of research. But remember going ahead with one’s venture without a correct business plan may be a sure recipe for failure. Creating a business plan needn't be complicated – the critical thing is to incorporate an outline of goals and action in terms of who, what, where and why. The business plan are often focused on one’s business generally or about any specific aspect of business.
Capital, also called ‘money’, is what one’s partners, shareholders or business members contribute in exchange for ownership in business. Some businesses are capital intensive, while others are capital efficient. a scarcity of capital is one among the main causes of a business’s failure.
Rushing into a location
Choosing a poor location could hinder one’s venture before even opening the door. a number of the factors that contribute towards one’s failure due to a poorly selected location are: one’s rent to revenue ratio; if one’s anticipatory spending is quite 8% of one’s monthly revenue on rent then the situation is outside the worth range, accessibility; ponder on the thought – will one’s clients think it's easy to urge to the situation of business, and therefore the building or shop; search the title to ascertain how often the building has changed hands and appearance up construction mortgages to see if and when the building has been renovated
Failure to understand the difference between profit and income
While ‘profit’ is that the difference between revenue and every one of one’s business expenses, on the opposite hand, ‘cash flow’ is that the net cash in-flow or out-flow, that find yourself in or out of, the checking account for a specific period of your time . A wise entrepreneur will dedicate the specified attention to maximum income additionally to the design dedicated to improving profitability. it's true that profits are important, but it's also important to possess the power to access these profits with a strong income so one can do what one’s business needs at that point .
Fighting on prices and failing on value
Reducing prices isn't always an excellent thanks to doing business, because the negative impact that price discounting can wear growth is large . New entrepreneurs got to grasp that buyers make their purchasing decisions supported many factors and price isn’t the first reason. therefore the important thing is to specialise in the particular value of their product/service to the buyer .
Not hiring the proper people
Many new entrepreneurs enter business for themselves; to be their own boss. This doesn’t mean that one has got to be the neatest person within the room. However, the neatest person is really the one who brought/ hired all the smart people together for the business venture. it's always good to recollect that hiring wrong people create losses, and conversely, if one succeeds in hiring the proper people, then make certain that they're going to have experience for the work and take responsibility to urge things done. When one has hired all the proper people for specific jobs then motivating employees which is one among the foremost difficult things for any entrepreneur, becomes a cake walk. for brief cut remember – ‘hire someone for what they will cause you to and not for what they cost you.’
A business thrives when discussions are supported accurate facts and it's here that bookkeeping comes into effect. Many first time entrepreneurs accept doing their own bookkeeping – which is that the wrong thing to try to to , unless one is that the competent at it. A competent bookkeeper can provide one with accurate/timely books which will become a compass to assist one navigate through difficult business decisions.
Lack of systems
A mistake that new entrepreneurs make is that they don’t see their business as a series of processes and systems. One must have systems in situ for everything that happens in one’s business – from production to plug to finance to sales. the purpose is that if one doesn’t do a project precisely the same way whenever , one can’t standardize it/delegate it, so one will find yourself doing it differently whenever , which suggests one will end you wasting tons of your time . One’s goal as an entrepreneur should be to figure on business, not in it.
Failure to take a position in marketing
Many new entrepreneurs view marketing as an expense and check out to avoid it. As a result, they never build brand awareness, generate leads or create buzz, then wonder why their business is failing to select up. First time entrepreneurs got to treat marketing as an investment which will help them in growing their business.
Blaming poor performance to external factors
The unwillingness to require full ownership of poor performance may be a human tendency. Yes, there are certain elements which will always be outside one’s control, but to be a very capable entrepreneur one must identify these ‘elements’ and develop business strategies to catch up on them.
Not having a transparent vision
One’s business vision simply means: where one is trying to require one’s business. this is often because if one’s vision is blurry then how will one know whether one has achieved one’s goal or not. By clearly defining one’s business vision one can build measurable meters – financial, operational and interpersonal functions. A concrete business vision will help one to guide the business well and keep him/her focused throughout the weeks, months, years and decades as business grows. This also helps in ensuring that one’s team understands the vision and work accordingly.
History tells us that great entrepreneurs are neither smarter, nor better educated, but what distinguishes one from the opposite is that a successful entrepreneur takes an equivalent twenty four hours each day , seven days every week and 300 and sixty five days a year and use them with greater efficiency. little question an entrepreneur’s life may be a roller coaster ride, but a touch of designing and therefore the wise wisdom to find out from the recommendation of others, can help one in committing fewer mistakes.