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Did you know that one out of five new businesses fails within its first two years? Even though eager entrepreneurs put blood, sweat and tears into their businesses, initial failure is common. First time entrepreneurs make many mistakes as they start out. Below is a list of 10 common mistakes that entrepreneurs make when starting a business:
Most businesses don’t start off with a lot of money so they must spend it wisely. Pay only for what the business needs. The wants can come later when your business is financially stable and ready to expand after a solid start. At the same time, be sure to invest in qualified, dependable employees and ensure the satisfaction of your customers. Finding the right balance is important and key to a successful launch.
Unless you are offering a completely new product or service, you will likely face competition with other businesses offering the same thing. You must be aware of competing businesses and understand their advantages as well as yours. You should promote what makes your business different and better.
Don’t be tempted to start a business without some help. Some entrepreneurs think they know their product better than anyone else and that doing all the work themselves is easier than splitting it among partners or trusted staff. Having a co-founder or an assistant who can give advice and ideas may help relieve the burden. Also working with people with whom you share a common interest can be rewarding and fun!
One key aspect of a successful business is having satisfied customers who come back again. Some entrepreneurs are so preoccupied with making money that they forget about their customers' satisfaction. A successful entrepreneur does everything she can to make every customer a returning customer by providing them a good experience.
Many new businesses fail simply because of poor timing: starting too late or too soon. Taking too long to plan and research might allow competitors to establish themselves before you start your business. You should expect to learn along the way, so don’t be afraid if you don’t have all the answers before launching your business because you will figure them out over time. On the other hand, some people rush to start businesses because they face unemployment or uncertain job prospects. Therefore, they start their business prematurely with an inadequate plan, resulting in poor product or service quality.
Entrepreneurs tend to be passionate about their product and can forget to share that passion with their customers. In other words, entrepreneurs must research whether a customer base exists for their concept. Hiten Shah, co-founder of KISSmetrics, once spent $1,000,000 on a business that never launched. He stated that he and his co-workers were perfectionists and didn't care about what their customers wanted. This is a great example of how an entrepreneur jumped into a project and did not consider customer needs.
Adapting to change is very important when starting a business because your plan can go in a totally different direction than you had anticipated. Problems or challenges might occur and will require you to rearrange or rethink your business plan. If your business is not able to adapt to change, it will be difficult for it to survive. For example, many businesses have had to adapt their models during the COVID-19 pandemic, like real estate agents who had to switch to virtual tours via FaceTime with potential buyers. This is one way business owners had to redirect their tactics.
Many people do their shopping online—especially during the COVID-19 period. Make sure that your website is equipped for them and optimized for mobile devices. You might lose business if your website does not offer customers a good experience. Customers must be able to find you online.
Accepting criticism is essential for owning a business. Criticism is feedback that will better your business. If you are denying criticism, that means you are not putting in the work to build your business—which indicates you shouldn't be a business owner. Have an open-mind to receive criticism and turn it into feedback to edit your business plan.
Many businesses pay so much attention to social media that they forget about their actual business. Although social media is a great way to spread the word, make sure it doesn’t not distract you from focusing on furthering your business, especially if your followers are not likely customers.
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