The big plan of starting a business is having a plan, and then having the discipline to act on it.
Being part of a startup isn’t always glamorous and often requires simply submitting yourself to the process. Startup success can be engineered by following the right process, which means it can be learned.
Here are nine common mistakes you should avoid when starting a new business.
1. Not spending enough money or spending too much money: Money is likely to be one of your biggest concerns as a new entrepreneur, it’s either you have to spend money to make money, or you’ll spend the bare minimum until you have some decent cash flow. Both of these attitudes when taken to the extreme could be harmful. Spend your startup cash wisely and don’t be afraid to invest in good people and quality products.
2. Thinking you have no direct competitors: The excitement about a new product or business can often mislead you to think you have no direct competition. In reality, it’s extremely rare not to have direct competitors, unless you have invented a completely new product, there will be someone who already has market share in your business environs. It is important to find out what the companies are and how you can differentiate your business.
3. Make hiring decisions based on cost: Although this is closely tied to the first point, it is so important that is deserves to be mentioned separately. When funds are tight, it’s tempting to reevaluate the cost of recruiting more hands into the job. However, the problem with this strategy is that you will end up paying in the long run. You need to note that low –cost employees and consultant are usually low-cost for a reason which could be owing to their being inexperienced, unskilled or unreliable. So beware!
4. Not setting attainable goals: New entrepreneurs can be enraptured or en-clouded with their “big idea” that they fail to work with a solid business plan. But the reality is that to become a successful entrepreneur you most set realistic and attainable goals in order to succeed. Make it a point of setting both short and long term goals and make sure they are specific. Don’t just say u want to make N 10 million this year, set reasonable goals and determine specific steps needed to reach it.
5. Not thinking about marketing: There is a common misled saying amongst people that “if you build, they will come” and it keeps trending among entrepreneur s. The reality is that a vast majority of startups will need to invest heavily on marketing. Take a look at where your competitors are spending their cash and ask yourself how you can compete and differentiate yourself.
6. Having too small margins: This has to do with prices of your products and services. Having a healthy profit margin will be critical to your success, but setting it too low will make life infinitely difficult for you in the future because your customers would not be thrilled when you need to increase the prices later on. Therefore take a look at your production and operating costs and determine how much flexibility there is. Ask yourself “can I reduce these costs in the future if necessary?” If not, choose a higher profit margin to accommodate these costs.
7. Thinking you can do it all yourself: In the beginning, it’s common to think that no one can do the job as well as you can. You know your products inside out and are the only one who truly has the passion to make the business succeed. This can burn you out and impede your success. It is advisable to have a knowledgeable and experienced consultant or mentor who can give you much needed objective perspective on your business and market.
8. Being confined to the fear of ‘what-ifs’: Robert F Kennedy quotes that, “Only those who fear to fail greatly, can ever achieve greatly.” Starting a new business is scary and isn’t for the faint-hearted. Being scared of failure and rejection is understandable, but letting yourself become incapacitated or “arms-tied” by these fears can significantly hinder your progress.
9. Putting your product first and putting people last: When creating your products or services, you must have a customer first mentality. Many new entrepreneurs are so concerned about making money that they forget the key to having a sustainable business i.e. having satisfied, loyal customers. It is not easy being a new entrepreneur and mistakes will be evitable part of the process, but that doesn’t mean you need to repeat everyone else’s mistakes.
Having said all, we wish you all the best.