Ali Hasan
More than 90% of small businesses fail within the first 5 years because of silly mistakes yet costly mistakes made by entrepreneurs. If you’re about to begin your journey as an Entrepreneur or you have just begun your journey, then you should stop right there and give this blog a read.
I still remember when I started my career as an entrepreneur 3 years ago and failed miserably because I made a lot of mistakes. The mistakes which were silly but were too expensive for me. I made these mistakes since I was young, inexperienced and didn’t came from an entrepreneurial background.
Slowly I had to learn about how to deal with various aspects of running a business while avoiding silly yet expensive mistakes. Since I have done these mistakes myself and have suffered losses, I am sharing these mistakes from my own personal experience. One thing more, while I was trying to make it big as an entrepreneur, my 3 businesses failed back to back and now I am currently pursuing my 4th business.
Now when I look back at my journey, I wish that I had someone who could have taught me about the mistakes that I did. If there was such a person, then I could have succeeded as an entrepreneur in my very first attempt, but never mind. I am writing this blog so that I can serve as a mentor to all the young & aspiring entrepreneurs who are about to start their journey.
While there are many mistakes that an entrepreneur can make, these are the top 7 mistakes that you should avoid in order to make it as a successful entrepreneur. In no particular order, let’s begin.
- Underestimating the amount of resources – This is a classical mistake as many entrepreneurs fail to calculate the exact amount of resources they will need for running a business successfully. I also made this mistake when I was pursuing my 3rd I forget to calculate the expense for marketing and when I was almost 6 months into the business, I realized that I made a huge blunder.
Now I didn’t had any money left for marketing and my business was doomed to fail as I was unable to calculate the exact amount of resources to run the business successfully. I made this silly mistake and it cost me almost everything as my business failed after 6 months.
When you start your business or when you’re about to start your business, you should try to calculate each and every expense that you might incur while starting and running a business. In fact when you calculate the amount, simply multiply it by 1.5 to get a better idea of the amount that you’ll need for running a business successfully.
This amount should include the startup costs, marketing costs, operational costs until you hit break even and a small backup cost for any unforeseen events such as a pandemic or a recession. I hope you don’t make the same mistakes as I did.
2. Thinking Marketing is an Expense – There are millions of entrepreneurs who think that marketing and advertising is an expense. In reality it’s not an expense, it’s an investment. A small investment to give your business a boost. If you’re in that group of people who still consider marketing as an expense, then it’s high time that you change your thinking.
If you don’t change your thinking, then you’ll never think of investing even a penny in marketing to give your business a boost. This might hurt your business as not a lot of people will know about you, your business and your offerings. What is the purpose of starting a business when hardly anyone knows about you?
Marketing or advertising is simply a way of selling, influencing and persuading people to buy from you. If you deliver what you promise, then it’s completely legal and ethical to advertise as much as you want. In fact, a unique marketing campaign can do wonders for you and give your business a competitive edge over your competitors.
There are many businesses that had the potential to become the next trillion dollar company but failed miserably because they went bankrupt even before people had a chance to know about them. Don’t make the mistake of treating marketing as an expense because it’s an investment.
You can start small by placing ads on Google or social media platforms like YouTube, Facebook or Instagram. They are quite affordable and offer targeted ads. As you gain more and more customers, you can rely on word of mouth but a little marketing will always help in building a positive brand image in the minds of your target audience.
3. Not knowing your Ideal Customer – Many times entrepreneurs make the mistake of being everything to everyone. They try to position their offerings for everyone in the marketplace. They do this because they haven’t yet figured out who their ideal customer is. Please don’t try to please everyone as this will set you up for total failure.
You should never be everything to everyone. You should always figure out who your ideal customer is. You can do this by asking a lot of questions such as:-
- Is my ideal customer male or female?
- Is my idea customer young or old?
- Is my ideal customer married or single?
- Does my ideal customer live in a big urban city or in a rural setting?
- What is the spending capacity of my ideal customer?
These are just few questions that you must answer in order to find your ideal customer who’s a perfect fit for your products and services. These are just some questions to know your ideal customer but you must question yourself more in order to know your ideal customer so that you have no problem whatsoever in pitching your offerings to him/her.
4. Micro Managing – One of the worst mistakes that you can make as an entrepreneur is to micro manage everything by not letting other people do some of your tasks. In order to build the next trillion dollar company, you should always have in mind that you have to work on the most important and urgent tasks which have the most profitable returns in your business.
In most cases entrepreneurs are so used to work in a certain way that they don’t hire employees even when they need to because they think that other people won’t be able to do the job like they do. Even when they hire some employees to delegate some of their work, they micro manage their employees and keep interfering in their work.
If you have a tendency to do this, let me tell you that you won’t be able to scale your business to the next level and you might be forever stuck on the same level as you will keep on micro managing your employees when you should have been working on something which has a greater return in your business.
The best thing you can do is to supervise an employee’s work until and unless you’re sure that he’s doing a good job. From there, you can leave them as now they’re equipped to handle the job in the desired way. Hence, always remember that your job as an entrepreneur is to supervise and not to micro manage because micro-manage is like babysitting and entrepreneurs don’t babysit their employees.
5. Taking too long to Launch – There are millions of entrepreneur who wait for the perfect timing to launch their business, only to later realize that there’s no perfect time to launch a business. Many entrepreneurs try to gain as much insight as possible before they launch their business and this leads to several delays.
They try to gain customer’s feedback by conducting surveys, doing a lot of research and by talking to business consultants before launching their business. But they ignore a simple truth that no one can predict the success of a business before its launch. There were many businesses that were touted as the next big thing but failed miserably after a couple of years.
On the other hand, there were many businesses that no one thought could even succeed but today they stand as super successful multibillion dollar companies that proved everyone wrong. I think the best thing you can do is to launch your business when you have 70% of the desired information.
Don’t worry about the rest 30% as this way you have more chances of being successful because you have the chance of collecting the real feedback from your customers who will be using your products and services.
When you launch your business even when you have some unanswered questions, you give yourself the ability to gather real feedback and respond to that in the most realistic way. On the other hand, information collected won’t be useful as you haven’t launched your business and any feedback would be more of a speculation or a suggestion rather than a brutal feedback by your customers.
6. Thinking Funding will solve everything – If you’re one of the entrepreneurs who think that if you had access to millions in funding, then you could have built the next trillion dollar company then it’s time to realize that you’re highly mistaken. While having funding does helps you in hiring better talent, running high quality ads and scaling up at a faster pace, it has its drawbacks to.
If you go to the internet, then you can search about various companies that had access to billions of dollars in funding but despite that they failed miserably and went bankrupt. Many companies failed during the dot com bubble, then many companies failed during the 2008 housing crisis, then many companies also failed during the 2020 pandemic and guess what many companies will fail in the next recession that will happen somewhere around 2030.
Money does solve a lot of problems for you when you’re running a business but it won’t solve each and every problem for you. It won’t give you an exceptional work ethic if you’re lazy. It won’t give you great business acumen if you lack it. It won’t help you with taking better decisions if you don’t learn from your failures or mistakes.
Hence, learn from your mistakes, keep educating and improving yourself consistently, work both hard and smart and don’t let funding stop you from being an entrepreneur.
7. Having the Wrong Partners – If you aren’t a solopreneurs and you work with 1 or more partners, then you need to be extra careful as you need to ensure that all of you guys are on the same page. Basically you and your partners should have the same goal in mind and everyone must be aligned with the same values.
A lot of businesses fail because there is a lot of friction between partners where no one agrees to no one. Having a business partner is like having a dual edged sword as the same sword which can help you can also hurt you. Hence, be very careful with whom you start your entrepreneurial journey as the same partners who can help you build the next trillion dollar company can also destroy you and your business.
So be careful and talk it out with your business partners to make sure that everybody wants the same end goal for the business. You can certainly differ in opinions but you guys shouldn’t differ for the desired goals and if you want to know how to find a business partner then please read our blog on the same topic.
Learn from your Mistakes
These are just some of the mistakes that you can make as an entrepreneur. These mistakes must be avoided at all cost if you want to make it big as an entrepreneur. While there could have been many more mistakes that people make as entrepreneurs, we gave you the most common ones which you must avoid in your entrepreneurial journey. If you make any, then simply learn from them and avoid them in the future.
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