Starting a new company is often a challenging and lonely path and there are many ways in which a prospect can fail. In today’s economy, most businesses fail within five years, even when run by highly qualified and experienced individuals. In the fast-paced world of business, entrepreneurs need to learn to adapt in order to ensure their short- and long-term growth and success.
Here are some of the most common drawbacks that entrepreneurs experience, and how you can avoid them when starting a new business venture:
Mistake #1: Marketing
Starting a business without knowing your target market and how to communicate with them wastes time and money. Less is always more and if you can’t say what you need to say about your product in one minute, then you don’t know your market or your industry well enough.
Fix: You need to be prepared to sell yourself and your business. State the products/services that are available in a clear and concise manner. You have less than 60 seconds to make an impression whether you experience a chance encounter with an investor or meet with a curious customer.
Mistake #2: Competition
Selecting the incorrect business venture where there is already market saturation, high competition and inadequate demand can result in failure to differentiate your offering for competitor products and penetrate the marketplace. Entrepreneurs need to investigate their industry carefully and select a market segment with higher demand than supply.
Fix: A business that is built on your strengths and talents will guarantee a greater chance of success. It is also imperative that you’re managing the day-to-day operations and building and developing your company, keeping abreast of industry trends and developments and being aware of the competition behaviour and how they work.
Mistake #3: Free Internet programmes
Internet scams in the form of a ‘free’ business set-up programmes will not make you money. Hard work and dedication is required in order for your business to be successful.
Fix: If you require large sums of capital to launch your company, go back to the drawing board. Scale down expensive plans and simplify the idea until it becomes more manageable.
Mistake #4: Fragmented business opportunities
By starting one business venture, failing after a month and then embarking on the next prospect is how many beginners lose large sums of money and valuable time. Create your own business opportunity and corner your own market.
Fix: Avoid being side-tracked by attempting to juggle various ventures at the same time. This will cause you to spread yourself thin at work and limit both your effectiveness and productivity. If you feel the need to jump into another project, you might want to relook your original concept and work on refining your ideas.
Mistake #5: Quick and easy money
Another pitfall that first-time entrepreneurs can fall into when starting up a business is thinking that money can be generated over a short period of time without putting in long hours and hard work.
Fix: Only make purchases which are necessary and keep all costs in check by maintaining low overheads and managing your cash flow effectively. Your money is the lifeblood of your company and its ultimate survival will depend on your ability to budget effectively.
Mistake #6: Procrastinating
Entrepreneurs must not wait too long to launch their product. Procrastination could result in a competitor launching first. Don’t spend months or years waiting for the right time to execute
Fix: Develop a strategy and timeline and then focus on achieving the goals and objectives by scheduling tasks on a day-to-day basis so that they are executed by the intended deadline. Once you have launched your enterprise, you will learn to make decisions under pressure and not to repeat mistakes.
Mistake #7: Expenditure
Starting out small, but efficient, is the way to go. Hire only the employees you need and consider a home office until your business starts to grow. Forget about elaborate offices, fancy cars and extravagant expense accounts.
Fix: Capital should only be injected into items that will yield a return on investment in the long run, such as the correct equipment and technologies for your business to run efficiently, administrative and professional costs (accounting and legal fees), and sales and marketing costs such as training and networking events.
Setting specific goals
All entrepreneurs have to contend with tough competition and therefore must remain proactive in their efforts to stay ahead and learn new things. In order to avoid failure it is advisable to hire an expert who can guide you through the formative stages of the business and help develop it into a mature and successful operation. Business coaching is one of many highly effective business tools for assisting start-ups, increasing productivity and building and sustaining growth.
In my experience, entrepreneurs who undergo coaching before launching a new business are more likely to set specific and manageable goals, which are structured and formal, than their counterparts who do not seek the necessary advice. Coaches are also equipped to measure and evaluate their accomplishments over a specific period of time.