Learning from the mistakes of other entrepreneurs who’ve broken ground before you is a great way to ensure success, whatever your endeavour is.
Below are six common mistakes every entrepreneur should avoid. Take heed!
1. Forgetting the Competition
Everyone has a competitor. Everyone. Even if you think you’ve found the perfect niche and there’s no one around to challenge you, you’re wrong. There are most definitely auxiliary competitors in your field that can start to take your traffic and customer base if you aren’t careful. At all times, remember that you're not alone. Analyse the market and figure out whom you’re up against, then plan and act accordingly.
2. Not spending enough cash (or spending too much)
As a new entrepreneur, money is likely going to be a tremendous concern. Most entrepreneurs barely have any money to spend, and those that do can often get into the “you have to spend money to make money” mindset, which is equally destructive if left unchecked. Instead, fall somewhere in the middle. Take into account your expenses and finances and learn to spend enough, but not too much.
3. Making hiring decisions based on cost
When funds are tight, it’s tempting to hire on the cheap. The problem with that is that in the end you’ll end up paying the price. Cheap employees and consultants are cheap for a reason… they’re cheap. They’re unskilled, inexperienced, or unreliable. Don’t pay more than your employees are worth, but don’t be afraid to shell out a little extra for someone who knows what they’re doing. Employees are the backbone of any endeavour, and you want a crack-shot team if you want to make it big. Seriously.
4. Thinking it’s all on you
In the beginning, it’s common to think that no one can do the job as well as you can. Duh. You started out with the idea, you know your products, you know your market, and you have the passion to take this thing all the way home. That said, this is really a recipe for burnout. You aren’t all-powerful. Just because you found a great niche and have a good idea doesn’t mean there aren’t other skill sets or spheres of knowledge you’re lacking in.
Take on a knowledgeable, experienced consultant or mentor if possible. They won’t know everything and you won’t know everything, but together you can achieve great things. This will give you a much-needed objective perspective on your business and market. It helps a lot.
5. Putting your product first
Okay, so this might not sound like a mistake, but it really is if your product or service comes at the expense of your customer. The customer is what pays you. The customer is what makes you money, not the product. You can have the most ingenious product or service in the world but if no one is buying it, what’s the point?
When creating your product and determining your business model, it’s critical that you have a customer-first mentality. Don’t get so worried about making money that you forget the key to having a sustainable business.
What’s the key to having a sustainable business, you ask? Well, it’s having satisfied, loyal customers who will buy over the long term. You have to keep these buyers around, and you have to keep them satisfied.
6. Making your margins too small
Having a healthy profit margin is critical to your success. Setting it too low now will make life infinitely more difficult for you in the future, seriously. This is because you’ll eventually have to raise your prices, and then your customers are going to be pissed. It’s better to set a realistic profit margin right off the bat.
Just scope out your production and operating costs, determine how much flexibility you have, and then set a reasonable price to have a solid margin. Don’t be afraid of running too high at the start of things.
