What Are the Most Common Mistakes First Time Entrepreneurs Make?
Posted on 23rd March 2017 in Business
Written by Freya Hughes
You finally have your own business where you’re the captain and can run a tight ship without question. While you might dream of a focused team, all climbing the rigging to expansion and success together, some experience nothing short of a nightmare when sailing out alone. There’s no map marking the spot where your treasure lies, but there are some sage words of advice waiting to be heard. You just need to know where to look. In this blog we look at some of the most common mistakes first time entrepreneurs make – and how to avoid them.
Preparation is key for any undertaking, but planning and executing are worlds apart. Having the discipline to implement your business plan and stick to it is a fantastic start for any entrepreneur, no matter which industry you’re operating in.
Self-discipline will impact on your business wholly; staff, customers and vendors will all recognise your commitment, so it should be a lifestyle you strive to adhere to. What else must we consider when we take the wheel for ourselves?
Trying to hit out-of-reach goals
You’ve just opened your business and you’ve set yourself goals in your 5-year plan. How are you going to be able to reach them?
If you’re not meeting your own expectations, morale is likely to dip. Make two sets of goals (long-term and short-term), so you can feel a sense of accomplishment more frequently, get those endorphins flowing, but still focus on the bigger picture.
There is, of course, the risk of looking at the bigger picture too much. If this happens the quality of your product might drop, staff may become disenfranchised and corners may be cut. Balance is everything here, so keeping tabs on what you’d like to achieve in the near and distant future will keep you grounded.
To spend or not to spend?
This has more than one issue attached to it. Firstly, you could be spending too much. Throwing money at marketing, a launch party, PR firms and the like may be worth it at the time, but think of the longevity of your spends.
Will anyone remember that party in years to come? Would you get a better ROI from speaking to a professional and forming a plan that way?
Whatever you decide, keep tabs on your business plan and balance sheet and use 3-way forecasting to ensure you’re not blowing your budget. Its ability to update in real-time will allow you to make informed decisions at the drop of a hat, so there’s no excuses left for outlandish financial decisions!
Secondly, you might not be spending enough. In those first few months that money is tight (I know what you’re thinking: ‘understatement!’). Be wise with your outgoings – remember that if you invest in quality, it tends to be more cost-effective in the future.
Imagine you’ve got the choice between a pair of handmade premium-leather boots or some more cheaply made, synthetic material boots, which look pretty similar. In three months review your decision. I’d wager that the leather boots are good as new, while the cheaper versions are already on their way to landfill. Now I’m not comparing your potential staff to shoes here, but you might realise my point is that quality lasts.
Pride vs self-doubt
What makes many entrepreneurs successful is their ties to others. Collaboration is where ideas can really get off the ground; creativity is sparked with the meeting of minds.
You don’t know what you don’t know, so let someone help you identify what you’re missing about the area or industry.
Self-doubt is natural – we all do it. The only difference between you and the next guy is how you deal with it. Take the time to work out what exactly you’re worrying about.
Am I taking too many risks? Will I run out of money?
Write these worries down and tackle them head-on. It might just take a fresh pair of eyes to look over your ‘what am I going to do?!’ list to put things in perspective and start troubleshooting. As they say, ‘teamwork will make the dream work’.
Rushing your research
It’s quite surprising how many of us fail to thoroughly research the area or industry we’re about to dive into. Competition will always be there.
They might not come in the shape or size you imagined but somewhere, somehow, someone’s going to be favoured by your customers.
Before settling on a site, take a day or two to walk around the area. Chat to locals and other business owners and see what’s missing there.
If you’re looking to open a site for the first time after working from home, can you afford it? Have you run through the different outcomes and planned for any problems that might occur?
Creating scenarios in your forecast will give you a great idea of how things might play out. This should give you the confidence to make the right decision for your business to grow. Make sure you’re going into this venture with your eyes firmly open.
Making your voice heard
This is crucial both internally and externally. If you don’t like the way your business is starting to go, make sure you speak up. Precious time might be wasted otherwise, and that’s time you’ll never get back.
Instead of making new sales and generating new leads, you’re finding yourself back-tracking and undoing mistakes. Be strong in your convictions and don’t let your peers pressure you into taking a course of action you’re not sure about.
Externally, you need to build your brand. A dated view is that if you make a fantastic product, people will come to you. Sure, this might happen if you’ve invented something completely new, but the chances are you haven’t.
Marketing is an essential tool, but one that doesn’t always come cheap. Look into how your competition promote themselves and think about how you can go one better and differentiate yourself.
Take a step back once in a while and make sure you’re happy with how things are running. And remember, it’s OK to make mistakes – that’s how the vast majority of us learn and grow as people and in business.