Published on October 23rd, 2020 | by Luke Fitzpatrick0
6 Common Entrepreneur Pitfalls To Avoid
You never stop learning once you start your own business, and each lesson is usually learned the hard way. That’s because there’s an almost infinite number of common mistakes small business owners can make, many of which can have an extremely negative impact. While there’s no such thing as a fool-proof plan for guaranteed success, there are some errors that are more common than others. Below are 6 of the most common start-up mistakes made by entrepreneurs.
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Not planning ahead
Creating a plan may seem like a tedious or even unnecessary job, but just because you’re only a small company doesn’t mean you shouldn’t plan ahead. Having a solid financial plan, marketing plan, and business plan covering your goals and what you want to achieve is essential, so you know exactly what you want the future of your business to look like. By taking a step back to look at the big picture, you will be able to steer your startup in the right direction. Remember.. by failing to plan ahead, you’re actually planning to fail.
Going it alone
Many entrepreneurs may want to be a jack of all trades in their business but doing everything yourself doesn’t increase your chance of success. In fact, not only will effective delegation of tasks allow you to focus on the more important activities, but it also helps build a strong foundation for your business that increases the chance of future success. Having a solid team behind you such as a banker, an accountant, and even an attorney ensures you won’t make mistakes that a professional with experience would know to avoid.
The number one reason businesses fail is limited or lack of access to capital. While there are ways to launch a small business with limited funds, having money there when it’s needed is extremely important for all startups. Therefore, cash must be handled properly at all times, especially in today’s uncertain marketplace, and should only be spent on necessary expenses within allocated budgets.
Thinking too small
There are a lot of entrepreneurs who only want to generate enough income to pay themselves a wage and nothing more. They also believe marketing to a smaller demographic will avoid fierce competition. This attitude is the quickest way to failure. Instead, you should always be looking ahead at the bigger picture and aiming to build an exceptional and profitable business.
Scaling too soon
Many assume growth will continue when they first start to succeed and make the mistake of expanding their business too soon. Unfortunately, scaling too fast and then learning that the growth was only a temporary anomaly could have dire consequences, such as new staff and not enough work or income to pay them. That’s why it’s important to focus on slow and steady expansion strategies that support sustainable business growth.
Only expecting success
The biggest mistake you can make in business is to be afraid of failing. That’s because learning from your mistakes, rebounding after your failures, and pivoting your business model are all the keys to success. In order to be successful, your business needs to have flexible processes and develop contingencies in case things don’t work out as planned. For example, opening up a line of credit in advance would be extremely helpful during tough times.
A final word
Starting your own small business is not an easy task. There are so many challenges and complex problems involved with launching a startup that the majority of them end up failing completely. The good news is that simply by being aware of the more common reasons why small businesses fail, you can eliminate many of these challenges altogether. Ultimately this will also increase your chances of beating the odds and achieving long-term success in your small business.