Starting your own business is exciting, but it definitely isn’t glamorous. Everyone loves a good rags-to-riches story, but few have the opportunity to see what happens behind the scenes – the late nights, the creative financial footwork and the stress that every entrepreneur has faced at one time or another. Throughout the process, being able to learn from your own successes and failures – and just as importantly, the successes and failures of others – is crucial for long-term success. We put together common mistakes entrepreneurs make to help you avoid them.
The Top 4 Mistakes Entrepreneurs Make
Not Spending Money Well
When it comes to spending money early on, entrepreneurs seem to take on one of two mentalities: “You have to spend money to make money,” or “I’ll spend as little as possible until I have decent cash flow.” Unfortunately, carried to extremes, either mentality can end up being your business’s downfall.
Spend your start-up cash wisely and think of it in terms of how you’re investing in your business. For example, it’s tempting to hold off on hiring a couple of reliable employees or skimp by seeking low-cost consultants. How much you decide to pay employees sends a clear message as to what quality of work you expect of them. Similarly, the compensation that an employee or consultant is willing to accept says a lot about what kind of effort, experience and dedication they’re bringing to the table. Spend money wisely by picking good people and good products, and you’ll see the payoff down the road.
Chances are that you’re starting a business because you believe that you have something to offer that meets a need that no one else is addressing. You may even believe that what you have in so above and beyond anything comparable that you have no direct competitors.
Unfortunately, the reality is that it’s unlikely that you have no direct competitors who have market share in your target niche. Don’t be blinded by your own bias; do your research, find out what these other companies are and figure out how you can differentiate your business.
Not Setting Attainable, Measurable Goals
Oftentimes, inexperienced entrepreneurs are so caught up by their long-term plan that they neglect setting the short-term goals that will get them there. Setting attainable goals that are specific and measurable tends to feel a lot less intimidating than big, vague goals. For example, instead of saying, “I want to increase my profits,” try, “I’ll increase sales over the next quarter by adding five new clients.”
Forgetting to Market
It’s tempting to think that your new business is so awesome that word-of-mouth advertising is all you need for your brand name to spread like wildfire. Unfortunately, free PR is only going to get you so far. At some point, you’re going to need to invest in marketing. This may include content marketing, paid advertising, investing in your customers’ mobile experience and ordering some business cards.
Starting your own business is one of the biggest challenges you’ll ever face, and mistakes are all part of the learning process. Learning from your mistakes and the mistakes of others can give you an edge as you learn the ropes and grow your business. Hopefully this list of mistakes entrepreneurs make helps you avoid them and gives you a great head start when starting your own business.