Too many entrepreneurs fall into the common small business pitfalls and end up losing everything.
According to the Small Business Administration Office of Advocacy, only about half of businesses survive past five years.
So what does it take to avoid those costly mistakes and continue living the American dream?
Keep reading this comprehensive guide to discover nine of the top business mistakes entrepreneurs make and how to avoid them.
1. Not Acquiring the Necessary Skills
Depending on the industry your business is in, there may be skills required of you to complete the job. For example, if you are developing software, some coding skills may be helpful.
Although there is no “one size fits all” set of skills for entrepreneurs, there are a handful of qualities that successful entrepreneurs possess, these qualities include:
- Determined
- Risk-takers
- Confident
- Desires learning
- Unafraid of failing
- Good with money
- And passionate
These skills can be taught or learned over time. One thing any successful entrepreneur knows how to do is surround themselves with talent in areas they struggle with.
2. Inadequate Research
A significant part of being an entrepreneur is having the ability to research and find answers to unresolved questions or problems.
Research is a huge part of starting a business. You must conduct research into:
- Your competition
- The industry
- Your product or service
- And the consumer
One way to conduct research is through the use of a SWOT Analysis. A SWOT analysis consists of writing down your Strengths, Weaknesses, Opportunities, and Threats.
Completing a SWOT analysis will give you and your team a better understanding of the state of the industry, what your competition is doing, and what you could be doing better.
Other ways to conduct research include:
Surveys – Surveys could be done in person, by telephone, through the mail, and even online. Surveys will give you straightforward answers about your business.
Focus Groups – Focus groups are another way of doing research. They can be more costly and time-consuming, but the results are why experts still use them.
Interviews – Similar to focus groups, but meetings are typically one on one. Interviewees can offer valuable insights into your product or service,
Field Trials – Field trials are an excellent way to determine how consumers are responding to your product.
3. Ignoring Intuition
This is why you became an entrepreneur in the first place, your intuition was telling you this is the way.
One of the biggest mistakes entrepreneurs make is ignoring their intuition and going in a different direction.
Being an entrepreneur is similar to being a captain on a ship. If you know your ship better than anyone else and know where your destination is, don’t let anyone tell you how to steer. Now the exception to this is if you are surrounded by experienced professionals that have been through it before and are giving you advice, its best to listen because they have seen a thing or two.
4. Failing to Surround Yourself With Talent
Part of being a successful entrepreneur is recognizing where your downfalls are and finding talent to help you in that area.
A typical startup mistake is thinking they can do everything by themselves. Understandably, you believe you know your product better than anyone else and should be the one to get the job done.
But trying to do everything by yourself is only setting you up for a burnout. Burnouts can leave you feeling exhausted and unable to do the job.
Many startups will hire less talented individuals because of the cost associated with hiring. When you do this, you are setting yourself back, and it will cost you in the long run. It’s best to hire the best talent in the first place and have those people working aside you.
5. Too Small Margins
It’s understandable why you would want to keep prices low to stay competitive with the competition, but if your profit margins are too small, you are putting too much strain on the business, and it will eventually catch up to you.
It’s not ideal to raise prices, but in some instances, it is necessary. Try taking a look at costs and see where you can potentially cut back so you won’t have to raise prices.
6. Failing to Put the Customer First
Another one of the common mistakes business owners make is by failing to put the customer first.
Many first time entrepreneurs are only in it to make money, and that is a recipe for disaster. According to a study by Levine and Rubinstein, 53 percent of entrepreneurs are motivated by making more money.
When you put profits over people, you will set yourself up for failure. People generally gravitate towards businesses that care about them more. A study by Wunderman concluded that 79 percent of consumers responded saying, “a company must demonstrate that they understand and care about me” before they purchase from the company.
7. Avoiding Technology
In this day of digital transformation, companies must keep up with the trends, or they will be left behind.
Advancements in technology have made it significantly more accessible than ever for companies to reach consumers. Advancements in social media have allowed companies to get creative and attract new customers from all over the web.
New technology is also helping companies become more streamlined, saving time and resources. Things like Microsoft professional support services make it possible to boost productivity by removing unnecessary and time-wasting practices, to learn more visit here.
8. Paying Too Much Attention to “What If”
Every entrepreneur knows in the back of their head there is a chance it doesn’t work out, and they could possibly fail. But when you give in to those fears and let them control you, you will lose focus and become wrapped up in the “what if’s.”
With any activity that involves taking a chance, like entrepreneurship, there is always the possibility of “what if,” but you cannot let it control you and make decisions based on it.
Instead, you must recognize the risks and make smart decisions to limit your chances of failing.
9. Not Making It A Priority
The same entrepreneurs that don’t make their business a priority are most likely the same ones who are entirely in it for money.
When you are an entrepreneur, your life will revolve around the business. It is like having a baby. You must nurture and look after it to make sure it develops into something beautiful.
Advice For Avoiding Business Mistakes
These common business mistakes are entirely avoidable and will give you a significantly higher chance of succeeding if you don’t fall into the typical mistakes business owners make.
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