If you’re starting your own business you’ll face a ton of challenges along the way. And you’re sure to make a few mistakes, too. It’s guaranteed. But here 10 of the worst mistakes you can make as a beginner entrepreneur, and they are ones you can avoid if you do the thinking and planning necessary.
#1 Failing to secure adequate investment
However you fund your business in those early stages – through family help, savings, bank loans or a crowdfunding initiative – you need to be sure that you have enough money. Your company might not be profitable for a year or even two. But you still have running costs and your own salary to pay. Be realistic about your cash needs.
#2 Not writing a business plan
Every business needs a solid business plan. It will help you to find investment. But creating one will also help you to clarify every aspect of your business. A business plan should lay out your target market, how you intend to reach them, the opportunities and risks your company faces and the targets you want to meet. It’s a great reference point to return to, particularly during your first few years in business.
#3 Forgetting to protect your intellectual property
Patents, trademarks and copyrights are hugely important. You don’t want someone else to come along and take your idea, or even your company name, as their own. Be sure to register all of your intellectual property and your domain names too.
#4 Trying to do everything yourself
Remember that old phrase – “Jack of all trades, master of none”? Very few people can run all aspects of a business at a high level. You may need to find employees or freelancers, plus service professionals (like accountants, lawyers, D&I experts, etc.) who can perform certain tasks for you. And learn to stop micromanaging when you have trusted staff on board.
#5 Lacking self-awareness
Successful business leaders cultivate the self-awareness to recognize their own strengths and weaknesses. This will help you to recruit staff, to delegate effectively and work to develop the areas that you struggle with.
#6 Not investing in marketing (or over-investing in marketing)
Effective marketing can be expensive. Even if you find free promotional avenues work for you, maintaining them will require a lot of time. But it’s worth the investment. You may have the best product on the market but, unless people know about it, you’re unlikely to make much money from it. On the other hand, another rookie mistake is to pour too many resources into advertising a product or service that isn’t yet fine-tuned to the market.
#7 Not keeping an eye on cash flow
Simple cash flow problems can signal the end for a budding business. Create and maintain a cash flow projection so you can be confident of having enough liquid cash to run your business on a day to day basis.
#8 Not listening to your customers
Some beginner entrepreneurs are so convinced about the value of their product that they forget about the people who’ll be using it. You need to listen to your customers and learn about their requirements to ensure that your product, your marketing and your customer service are all in line with their expectations.
#9 Being afraid to spend money
When you’re just starting out you’ll be working on a tight budget. But it’s worth remembering that you sometimes need to spend money in order to enhance your chances of making some. That pricey software could really speed up your operations. Or another member of specialized staff could take your website to the next level.
#10 Losing faith
Every business goes through tough times. And as an entrepreneur, you’ll make mistakes and have to learn from them. Everyone needs to know when to call it a day. But don’t let early stumbles get the better of you. Being an entrepreneur means learning to adapt, working your way around problems and always keeping faith in your abilities and your vision.
Running your own business is challenging but it can also be hugely rewarding. Try to avoid these big mistakes to hit the ground running and give your new enterprise the best shot you possibly can.