Everyone dreams of starting their own business, but only a few are able to fulfill this dream. Starting a business can certainly be exciting and challenging, but there are several common pitfalls that can unnecessarily cause entrepreneurs to stumble on their road to success. They get caught up in the big picture and lose track of some important aspects of business.
The mark of a successful entrepreneur is the ability to recognize potential pitfalls that can ultimately make the difference between business success and business failure. So, here’s a look at three common mistakes entrepreneurs make when they start a new business, as well as some suggestions on how to avoid them.
Lack of Research
This is the most common startup problem, especially among young entrepreneurs. Yes, it’s good to be full of life, energy and ready to conquer the world, but it’s detrimental to ignore basic market research and business planning.
Would you start new activities or take on a major life challenge without first understanding key information? Most likely, your answer is no. The same reasoning should apply to starting a new business. Thankfully, in today’s fast-paced and tech-driven world, you have a number of easily accessible resources available at your fingertips – starting with the Internet.
So, why not take advantage of it? Learn about your industry in detail, keep an eye out for current trends, competition, initial capital requirements, and develop budgets and sales forecasts. This practice alone can make or break a business.
Going At Entrepreneurship Alone
Thinking of running a business alone is another mistake many entrepreneurs make. Whether this belief comes from their psychology, environment or family upbringing, the thing is you just cannot do it all by yourself. Learn to identify where you need help and find the right support when the time comes.
Asking for help when required is not a sign of failure; instead it’s a sign that your business is growing (which will inevitably require additional expertise). So, I suggest you take it as a positive sign. Running a successful business depends on team effort. The stronger your team, the more successful and profitable your business will become.
Not Saving Enough
Operating a successful business requires your time, money and effort. If any one of these things falls short, your business can collapse like a house of cards. If you plan to bootstrap your business and saving money is not a priority, then you won’t be able to sustain your business for long. At some point, it will become difficult for you to run operations with limited cash flow.
You should make a simple personal budget and a startup budget and record all fixed and variable monthly expenses as well as an estimate for monthly income. Budgeting will give you a rough idea of how much money you have to make and spend. You have to adapt the habit of spending less than you earn. If your budget indicates you are spending way more than you are earning, it is time to cut back.
Every startup or small business should look for ways to run as lean as possible and to cut costs or reduce expenses. Consider purchasing used equipment and furnishing for your home office. Make sure you are not wasting energy and utilities. Spending a fortune on advertising can hit your budget very hard; so consider grassroots marketing using social networks and look for ways to reduce marketing expenses.
Many small businesses fail due to problems they neglect to address and overcome. However, keeping the above points in mind and doing whatever you can in advance to avoid these startup obstacles is a primary key to success.
This article has been edited and condensed.
Alice Scarlet is writing on behalf of UK-based Assignment Market, an education consultancy that assist students who often ask, “Can you help me do my assignment”. Scarlet also runs her own small business where she enjoys being her own boss. Connect with @assignmentmarket on Twitter.
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