How To Avoid 8 Common Mistakes That Entrepreneurs Make

Is owning a business as easy and beautiful as it sounds? Certainly not! There is a lot of effort that goes into churning out profits. Every business is different and unique with an individual set of problems. Two businesses may not share a single success formula. But one can learn from the failures of another.

Let’s take a look at some of the common mistakes that entrepreneurs make while starting and running their businesses and the ways to avoid them.

1.   Poor Business Planning

First-time entrepreneurs have a clear idea of the service/product they want to offer. But they have no idea about the kind of business they want to get into. They do not explore the company structure which is best for them. There are many options including Limited Liability Companies (LLC), corporations, and partnerships. While you may be aware of the last two options, the idea of LLC is vague. Forming an LLC is a great option as the owner of an LLC is not personally liable for company debts. It has many ownership advantages and tax benefits.  Entrepreneurs should explore different ways of setting up their businesses.

Moreover, the rules and regulations differ by region, so it is very crucial to research the rules of that specific place before starting the process of incorporation. For example, if you want to start a business in California, go and search for ‘steps to start an LLC in California’ and get a thorough idea about it before starting the journey. You can run a similar search for your region.  

Ways to deal with it

• Make business planning the first step of setting up a business.
• Hire specialists like Chartered Accountants to evaluate the profit associated with the business model.

2.  Unsystematic Approach

Generally, every business starts with a low volume of sales. With such low volume, it is simple to run a business. So, the entrepreneurs do not have any system to deal with bulk orders and high sales. Any sudden take-off in business will be difficult to handle. With no system of stocking and selling, you will end up losing customers.

Ways to deal with it

• Entrepreneurs should invest in applications, tools, and physical spaces to handle any spike in business.
• They should chalk out a list of vendors and suppliers for bulk purchases. This way, they will be always ready to handle any volume of traffic.

3.   Multitasking

Multitasking is great only to an extent. Entrepreneurs tend to handle different work profiles which can be allocated to various individuals. Sometimes, they do this to save money and in other cases, they do not trust anyone with the job. Though this strategy may save some money, it is exhaustive in terms of time and energy. The business owner will not get time to devise strategies to boost sales and introduce innovations. These strategies can be profitable in the long run.

Ways to deal with it

• Let experts do their job. Hire different people for different work profiles and keep a tab on their work.
• Use tools like daily worksheets to keep an eye on the everyday targets of the employees.
• Business owners should invest their time in making profitable strategies and communicating with like-minded people to develop profitable ideas and collaborations.

4.   No Investment in Branding and Marketing

Branding and marketing are two areas that need attention. Branding is about creating a brand image. In marketing, you develop campaigns to sell the products to get along the business goals. Both aspects are important. Statistics suggest that 62% per cent of customers are influenced by brand image while making purchase decisions. Marketing comprises many components including SEO and content marketing. In a survey, 74% of companies agreed that content marketing has helped them boost lead generation. Many entrepreneurs ignore the value of branding and marketing in this digital age and stay behind their competitors.

Ways to deal with it

• Entrepreneurs should hire brand designers and create a marketing team to develop strategies to create a strong market image.
• Businesses should employ different marketing strategies. They can take the help of content marketing. You can create impressive video content to promote your products and services.

5.   Lack of Defined Short-Term and Long-Term Goals

Many entrepreneurs start their journey without any clear goals. They end up celebrating the first order or first success. They become very relaxed. Entrepreneurs assume the smallest success as a milestone and become delusional with success. With no hard-lined goals, in the long-term, there might be nowhere to arrive. So, a business that seems successful at the start, may come at no-gain and no-loss terms. Many business owners quit and shut down their businesses after setbacks.

Ways to deal with it

• Small celebrations should be like a pat on the back. You should not assume it is a success.
• Define long and short-term goals
• Ensure that achievement of short-term goals leads towards long-term goal

6.  Poor Customer and Employee Feedback Mechanism

Business owners generally rely on social media and online feedback for their products. The business plan is made according to the performance of the product in the market. They do not take the real feedback of the customer into account. There might be pain points for the customer that a business needs to address. The employees work at ground level and interact with customers. Their feedback holds equal importance. Ignoring this feedback, entrepreneurs miss some major and meaningful changes in their upcoming version of the product/services.

Ways to deal with it

• Create customer feedback forms and portals
• Resolve each complaint and address every concern
• Include important pain points in the product portfolio and future business plan

7.   Out-of-Date Processes

In this digital age, it is important to stay updated. Many entrepreneurs stick to basics like a basic website. They do not get the visibility needed to succeed in business. Despite having poorer products/services, their competitors perform better in the market. Businesses fail to develop strategies to stay at the top of the competition.

Way to deal with it

• Employ the latest tools and applications to beat the competition
• Develop blog ideas guide and create blogs with SEO to stay in trend.
• Adopt AI and other trending solutions that offer better output in less time.
• Use advanced tools to continuously monitor the performance of the product and marketing campaigns. Make changes in marketing strategy after revising the results.

8.  Lack of Technology

In this digital era technology is part of every sector and every field. It can be used in every aspect of business. Many entrepreneurs stick to their manual work and go slower than their peers. They do not divert investments towards technical upgrades. They opt for manpower over technology which costs them resources and time.

Way to deal with it

• Promote technical education in the workforce
• Adopt the latest technologies in every phase of product development, from market research to quality assurance
• Create funds for technical education and upgradation
• Hire technology experts to train the employees and lead the technological evolution of the business

Entrepreneurship seems glittery from the outside but it demands a lot of energy and time. Every business faces setbacks and every business owner makes mistakes. The new learnings come from these mistakes. So, they should not be taken as failures. Entrepreneurs should address these common mistakes and work on them to create a robust strategy for success.