9 Mistakes New Entrepreneurs Should Avoid
When you’re launching a business, you’re bound to stumble sometimes. But some mistakes are certainly avoidable. Here are a few common entrepreneurial mishaps you should try to dodge, from hiring the wrong team members to chasing an idea that isn’t your passion.
Starting Without a Plan
You might be excited to start your business, but you should definitely draw up a plan first. If you don’t have a plan, you won’t know how to operate or market your business – and you might not even understand what problems you’re trying to solve for your customers.
Failing to Conduct Market Research
Who are you selling your product to? If you don’t conduct market research, you’ll never know who your audience is, and your sales will falter. By carrying out market research, you’ll know who your customers are, as well as who you’re competing with for their attention.
Not Seeing the Value in Education
Knowledge is power – which means that by failing to take steps to advance your knowledge and understanding as needed, you’re putting yourself in a place of weakness. Luckily, there are plenty of ways to change this. For instance, if you’d like to expand your knowledge of computer science in order to bolster your business (or expand your career options), you can go back to school for an online degree; use this to your advantage and leverage the flexibility that comes with online learning platforms. You can also look for training classes and programs to further your knowledge about specific tasks.
Poor Understanding of Finances
Maybe it seems like your business is successful, but you won’t really know unless you carefully monitor and manage your finances. Poor financial management can lead to a myriad of problems. Bayzat states that you could run into cash flow shortfalls, hurt your credit score, or even get hit by penalties if you’re unable to pay your taxes.
Ignoring Legal Compliance
Maintaining legal compliance with business regulations in your area is essential for the continued operations of your company. Slipping up in this area could lead to fines, legal action like civil lawsuits, reputational damage, or the loss of clients due to breaches of contract.
Hiring the Wrong Employees
As your workload grows, you’ll want to bring staff on board sooner rather than later. But rushing to build your team can result in regrettable hiring decisions. To build a strong, reliable team, you need to establish specific roles and responsibilities, create a shared scoreboard to track progress of your employees once they’re hired, and promote team engagement initiatives.
Expanding Too Quickly
If your revenue is increasing, you might take it as a signal that you should expand your business as soon as possible. But growing too quickly can be unsustainable and lead to trouble down the road. For example, Sujan Patel states that the social gaming company Zynga tried to grow rapidly, but due to their dependence on Facebook which could not be replicated on other platforms, their growth petered out dramatically. Additionally, the CEO of KIND Snacks struggled to pay his own salary for a time because overemphasizing growth meant spending too much on order fulfillment, leaving little for paychecks.
Avoiding Innovation
Sticking with the same products, services, and processes might serve you well at first. But a failure to innovate could spell out the end of your business. A lack of innovation may mean losing market space to your competitors or failing to meet your customers’ shifting expectations.
Neglecting Customer Opinions
Perhaps you haven’t given any thought to how you could collect and analyze customer feedback. This is an often overlooked method for improving your products and services! Major corporations often use this approach. UserReport states that Amazon changed its review ranking system due to customer input, and the SaaS helpdesk platform Groove optimized its onboarding process as a result of customer feedback.
Opening your own company is a dynamic journey full of ups and downs. But by avoiding these mistakes – from allowing your education to stagnate to missing out on innovations or hiring the wrong people – you can get your business off to a solid start! With these tips, you’ll be able to establish a reliable team, take in feedback from your customers, and more.
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