10 Most Common Mistakes Made by New Entrepreneurs

7:13:00 PM

Launching a startup is the biggest challenge for new entrepreneurs, without having knowledge and skill. Starting a business and getting it wrong is part of starting a business -- so what should entrepreneurs avoid? 
When it comes to launching a business, there is no manual to ensure business success. However you can become successful entrepreneur by avoiding many common mistakes that business owner makes very often. These common yet biggest startup mistake can sink your entrepreneurship before its sail.

10 Most Common Mistakes Made by New Entrepreneurs
For many entrepreneurs, the ideas come easy but the processes are a different story. Your typography skills may be impressive enough to secure endless deals with creative agencies but without the skills you need to balance the books, no amount of jobs will lead to cash flow without a proper strategy to handle it all.

Here are the top 10 mistakes that, in my experience, entrepreneurs make when they start a company:

1. Jump alone. 

It is difficult to build a business that can expand if you are the only person involved. It is true that a single-person public relations firm, web design, or consulting firm may need little capital to begin with, and the price of hiring a single administrative assistant, sales rep, or low-level employee can consume a good deal of Your profits. The solution: Make sure there is enough margin in your prices to allow you to include other people. Clients usually have no problem with outsourcing as long as they can contact you, the knowledgeable professional who manages the project.

2. Ask too many people for advice. 

Getting the expert input is always good, especially that of experienced entrepreneurs who have built and sold a successful business in their industry. But getting the opinion of too many people can delay your decision so long that your company will never start. The answer: Build a solid advice board that you can go to regularly but always managing the day to day business of you. 
Call your [counseling] team for conference calls every two weeks or at least once a month. You wish you had done it before!

3. Dedicate too much time to product development and not enough sales. 

Although it is difficult to build a large company without a great product, entrepreneurs who spend too much time making adjustments can lose customers to competitors with a stronger sales organization. "I call this [the mistake] the 'Field of Dreams' of entrepreneurship. If you build it, they will come,". A software company in New York, who has committed The same mistake in their own business. "If you don't keep your eyes firmly focused on sales, you're sure to run out of money and energy before you can get your product to market."

4. Focus on a market too small. 

It is tempting to try to capture a niche market, but the growth of your company will quickly hit a wall if the market you are pursuing is very small. Think of all the high school basketball stars who dream of playing in the NBA. Since there are only 30 teams and each only contracts a few players, the chances that your child will be the next Michael Jordan are quite limited. The Solution: Choose a larger market that gives you the opportunity to get a bigger portion of the pie even if your company is just a small participant.

5. Enter a market without a distributor partner. 

It is easier to penetrate a market if there is already a network of agents, intermediaries, factory representatives and other re-sellers ready and available to sell your product in the existing distribution channels. Fashion, food, media and other major industries work this way; Others are not so lucky. That's why service businesses like public relations firms, yoga studios and pet care companies usually struggle to survive, alternating between banquets and famine. The Solution: Build a list of potential referral sources before starting your business and ask them if they would be willing to refer you to customers.

6. Pay more for customers. 

Spending a lot of money on advertising can attract many customers, but it is a strategy that will lead you to lose money if your company can not convert those tickets into value from loyal customers. A company or website that spends $ 500 on advertising to acquire a customer who pays $ 20 a month and cancels the subscription at the end of the year is simply dumping their money. The solution: Test, measure, and then try again. Once you've done enough testing to determine how to make more money by selling products and services to your customers than you spend acquiring those customers, launch an advertising campaign.

7. Collect very little capital. 

Many new businesses assume that all they need is enough money to rent space, buy equipment, fill inventory, and get customers through the door. What they usually forget is that they also need capital to pay for their wages, utilities, insurance and other expenses until the company starts to generate profits. Unless you drive the kind of business where everyone works for the sake of art and their compensation differs, you'll need to raise enough money to keep it afloat until revenues are able to cover your expenses and generate enough positive cash flow. The solution: Calculate your new business costs before you open your doors, not after.

8. Raise too much capital. 

Believe it or not, collecting too much money can be a problem too. Companies with too many funds tend to become big and swollen, hiring too many people too soon and wasting valuable resources on kiosks at business fairs, parties, image advertising and others. When money runs out and investors lose patience (which is what happened 10 years ago when the booming Internet market collapsed), new businesses that squander their money will have to close their doors. No matter how much money you manage to collect at the beginning, remember to save some time for the bad times.

9. Don't have a business plan. 

Although not every company needs a formal business plan, a new company that requires significant capital to grow and more than a year to achieve profit should set a plan for how much time and money it will need to reach its goal. This means looking at the measures that will make your business work and creating a model to recreate 3 years of sales, earnings and cash flow projections. 
I wasted 10 years [wasting time] thinking like an artist and not as a businessman. I learned that you must put some of your creative genius into the business plan that predicts and sets goals for growth and success.
Here are seven steps to planning a successful business.

10. Think too much about your business plan. 

Although many entrepreneurs I have met take impulsive decisions and do not do the necessary work, other entrepreneurs are afraid to start up until they are 100% certain that the plan will succeed. A lawyer I worked with a few years ago was so suspicious of leaving his job with a well-paid salary to launch his business that he never met with a single bank or investor who could have financed his company. The truth is that a business plan is not a crystal ball that can predict the future. At some point, you must close your eyes and throw yourself.

Despite many books and articles that have been written about entrepreneurship, it is simply not possible to start a business without making some mistakes along the way. Just try to avoid making a mistake so big that your company can not then recover to keep fighting.

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