The journey of building a new business is exciting and often filled with great promises. However, the journey is fraught with an array of pitfalls and challenges. It’s essential to recognize the mistakes to avoid when building your first business. Avoiding mistakes can help you build a successful business over time.
In this article, we cover 15 mistakes that new entrepreneurs make. By learning from the errors of others, you can increase your chances of success and establish the foundation for a resilient and flourishing business.
1. Fear of starting
One of the common mistakes that most new entrepreneurs make is the fear of starting. As you embark on your journey to start a new business, you’ll likely experience different forms of fears, including but not limited to:
- Fear of failure
- Fear of the unknown/uncertainty
- Fear that the business idea is not good enough
- Fear of success
- Fear of being judged by others
- Fear of rejection
It’s normal to experience fear when starting a new business. Even Bill Gates, one of the world’s richest persons, actually feared that Microsoft would fail. Luckily, it’s possible to conquer fear. If you find yourself struggling with the fear of starting, you need to tackle the fear head-on. Just start and tell yourself no one cares or pays attention. Don’t let the fear prevent you from starting the business that you relish.
2. Not setting a goal
Another biggest mistake is not having a goal. Goals set out the roadmap to help you execute the business idea, boost performance, and measure your success. Often, new entrepreneurs feel that setting goals is not worth the effort and time. But, not setting a goal leaves you and your team directionless and without a specific outcome-oriented destination for your business.
Failure to set specific and realistic goals can also impede the growth of your business in different ways. First, your team is lost when they can’t visualize clear goals and direction of the business. Second, with a goal-oriented business strategy, it may be challenging for you to attend to all the duties of a business owner. In addition, you’re likely to spend money the wrong way if you don’t have clear goals for your new business.
It’s a lot easier to steer your new business to success if you don’t have the direction. Thus, commit adequate time and effort to set out realistic and specific goals.
3. Having too many goals
Setting too many goals is another common mistake to avoid when starting your new business. New entrepreneurs tend to be overly enthusiastic, which often compels them to set too many unrealistic goals. While goals provide a clear path for attaining real growth and success, too many goals can have a disastrous impact on your team and business.
With too many goals, you may end up sacrificing the most valuable goal for less significant goals. You’ll fail to hold on tight to what’s important. Furthermore, the goals can trigger unhealthy competition among your employees. For instance, employees may cut corners when providing services to customers, which would be terrible for the reputation of your business.
Thus, you’ll need to limit the number of goals for your new business. Experts recommend having a maximum of 3-7 strategic goals that are realistic, specific, and time-bound.
4. Not preparing a business plan
Many new businesses close down because entrepreneurs fail to create a business plan. The problem of not having a business plan is that you’ve no clear picture of whether or not your idea is feasible. Starting a business without a business plan means you’ve no clear understanding of the financials, market, and operations.
A business plan actually provides the roadmap that guides you through the process of initiating and managing the business. The plan improves your odds of successfully launching the business, generating sales, and achieving long-term success. While it may be tedious and require extensive research, preparing a business plan is critical to bringing your business to success.
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5. Not consulting or seeking outside help
As you embark on getting your new business off the ground, it’s impossible to do everything by yourself. Starting and running a business involves multiple tasks. You have to manage working capital, compile financial reports, and market products. Trying to juggle these tasks can be overwhelming and set yourself up for failure.
Therefore, avoid the mistake of trying to do everything on your own to increase the odds of success. Don’t be reluctant to seek help. Hire an outside financial consultant, seek advice from a mentor, and delegate tasks to employees. By seeking outside help, you can commit much of your time and energy to growing the business.
6. Failure to conduct market research and define your target market
Another frequent mistake that new entrepreneurs make is the failure to conduct market research and define the target market. If you fail to research your target market, you’ll have no knowledge about people’s enthusiasm and attitude toward your idea. When you overlook market research, you might end up selling products or services that are not right for consumers. Also, you risk wasting resources on marketing efforts that don’t reach the target market. It is essential to conduct market research before starting any business. Market research helps you understand consumers’ needs and develop appropriate marketing strategies to reach them.
7. Undervaluing capital requirements
Many entrepreneurs fall into the trap that they can achieve more with less. The risk of closing your new business is extremely high when you underestimate the capital requirement. The mistake puts you in a situation where you don’t have adequate funds to keep the business afloat. In addition, starting a business with inadequate funds means you cannot hire or retain talented employees.
It is essential to take steps to avoid this mistake even before you start the business. Start off by creating a business plan that specifies the projected expenses and revenues. The business plan helps you determine the amount of funds you need to get your business started. Take time to save up money in advance. Consider taking loans or seeking an investment fund to create enough working capital.
8. Hiring wrong people
Hiring the wrong people can have severe consequences on your new business. First, you’ll incur losses when employees leave the business, and you have to spend your resources to re-fill the positions. Second, wrong people introduce a negative attitude into your business. The low morale in the business can affect productivity negatively. Lastly, every time the bad hire interacts with your clients, the reputation of your new business is at risk. Thus, you must identify and hire the right people for any position in your business. Take your time to create and conduct well-structured interviews before bringing anyone on board.
9. Neglecting social media presence
As a new entrepreneur, don’t make the mistake of failing to build a solid social media presence. Your new business requires visibility on social media platforms to grow and succeed quickly. Nowadays, ads placed on social media platforms like Linked, Facebook, X (formerly Twitter), Instagram, and TikTok provide an easy and cost-effective method to reach specific markets. Ultimately, you must take advantage of social media to push out information about your brand and products/services to potential customers.
10. Neglecting marketing
Not having a comprehensive marketing plan is another significant mistake you’ll want to avoid when starting a new business. New entrepreneurs are often reluctant to invest in marketing. Others opt to initiate free marketing, which includes referrals and social media marketing. If you want your new business to succeed quickly, you’ll need to create a detailed marketing plan that incorporates the acquisition of new customers and turning them into loyal customers.
11. Not setting up a business bank account
To run your own business, you’ll need a bank account that is exclusively dedicated to the business. If you run your business using a personal bank account, you risk running into problems like complicated record-keeping and denial of loans. Separating your business and personal monies helps you build credibility. You’ll appear credible and professional when you write checks from the business account. Your chances of securing a loan are high if you have a bank account dedicated to your business.
12. Not being patient
A lot of entrepreneurs fall into the trap of thinking that the business will be a hit almost immediately. That’s a wrong attitude that causes many businesses to close. Entrepreneurs often become impatient when the product takes too long to build or when the sales volume is slow. Impatience contributes to mistakes that increase the chances of subsequent closure of the business. So, always note that running a business is not a sprint. It takes time, and a great deal of effort to achieve your desired results.
