13 Huge Entrepreneurs' Mistakes You Should Learn From
Author: Concept Agency
Published: 04/20/22
According to Fundera, around 20% of new businesses fail within the first two years. You probably ask: Why? And how to prevent it? What mistakes to avoid when starting your own business? As a marketing agency that supports small and medium-sized enterprises, we have had thousands (literally thousands!) of conversations with business owners (experienced and also freshmen). We've collected the 13 greatest sins of entrepreneurs that they commit at the beginning of their activity. Each can easily lead to the collapse of even a business with huge potential. Are you sure you are not committing any of them?
You can avoid all these serious mistakes!
Starting your own business is never easy. As a newly minted entrepreneur, you probably have many exciting and innovative ideas to start your business. You have much enthusiasm for action, and you are ready to invest time and money in the development of your company.
These are great attributes! But stats are inexorable, and you need to know that there is a high risk that not everything will go according to plan. How to reduce the risk of error? It's simple: analyzing the most common mistakes of new entrepreneurs will help you avoid failure from the very beginning.
Get started with the list of the most common mistakes entrepreneurs make below.
1. Doing all, even the most minor, tasks by yourself.
If you run a business yourself and do not employ anyone, this rule does not apply to you. However, if you have an employee or partner, remember: there always be many things to do. Especially at the beginning of your business journey. You'll probably be tempted to take care of everything, even the smallest and most essential tasks. You should change this habit in the first place.
Passion and commitment are plentiful fuels for action. However, perfectionism can make your business fail. And it certainly will not have a good effect on your condition and well-being. Constant rush and too long working hours will lead any entrepreneur to burn out too quickly.
Try to set ambitious but REALISTIC goals that you will be able to achieve step by step. Plan goals: daily, weekly and monthly. Elon Musk (the richest man in the world on the day of writing this article) said that building a business is not a sprint. It's a marathon. There is much truth in that.
2. Forgetting about task hierarchy
The most common trap that business owners get into when they start their business is getting all the tasks done at once.
Research by scientists has proven that multitasking is one big myth. Your brain can't focus on doing 2 or more things at the same time. And the more you take on, the more distracted you will be and the harder it'll be for you to get satisfactory results from just one task.
Here's our advice:
- You can schedule several things to do for the day, but do them one by one, not all of them at once.
- Prioritize your tasks, such as Low, Medium, and High. Focus on getting things done first.
- Create a clear action plan and stick to it to avoid being overwhelmed.
- Better to do fewer things to the end than to do too many things at once and finish nothing.
How to prioritize each task:
Ask yourself what is most important to your company now and why.
Then, think about which of these things will help your business achieve the most significant ROI (Return of Investment). These tasks are critical and should be your highest priority. Leave the rest of issues for later.
Tools designed for time management and task scheduling will also help you organize your tasks, i.e. Trello or Asana.
3. Unrealistic approach
One of the evident mistakes of young entrepreneurs is an overly optimistic approach to running their own business. Faith in your abilities is essential, but the belief in the company's tremendous success and sure profits may be fatal if any arguments don't justify it. So it's best to base all your ideas on a solid business plan. Start by creating a SWOT analysis that will allow you to realize both the good and the weaknesses of your business. By being aware of your shortcomings, you know exactly what needs to be improved to keep improving.
4. Implementing ideas without testing
It's a massive mistake for novice entrepreneurs to believe that their product or service is useful without testing. Even the most innovative idea requires checking whether anyone will be interested in buying it. Therefore, the first step before starting a business should be to conduct tests on the target group. Conscious entrepreneurs always test their concepts on numerous groups of recipients. Feedback from the results obtained will allow you to get to know the needs of potential customers better and improve your product or service.
5. Avoiding the help of professionals (also at the beginning of business)
Performing all duties alone is one of the greatest threats for every young entrepreneur. Many people who run their businesses do not use the help of qualified professionals. It's often because of the desire to save and overestimate one's possibilities. But remember that even seemingly trivial tasks will take you much more time than specialists in a given field. So before you decide to run your own accounting or moderate social channels, you should think carefully about it. Often it is better to outsource specialized tasks to save time on your own assignments.
6. No Alternatives or preparation for difficulties
Not having a plan B is one of the common mistakes of novice entrepreneurs. Have you thought about what you will do if your original business plan fails as expected? When you start your own venture, you risk that your original idea may not work out in practice. In such a situation, it remains only to close the business? Of course not! It is worth preparing for possible failure and an alternative action plan. Thanks to this, if at some point your company starts to make losses, instead of altogether abandoning the business, you can choose a different direction.
7. Neglecting Your Marketing
Strategy for good marketing and sales plays a huge role in developing every business. Unfortunately, many entrepreneurs disregard professional marketing activities when starting their own company. Why is it worth spending a budget on marketing and planning your strategy from the beginning? In 2022 there is so much competition in the market that you have to become visible. Only then customers'll notice your brand and products. Appropriate marketing and promo activities will help you gain the trust of potential customers and make them choose your services, not the competition!
Our tip:
Want to increase visibility and reach a wide audience? A professional website and beautiful social media are crucial. Start with the website because it lets you sell. Wondering how to create a website that brings you sales? Read What to include on a business website to start earning money.
8. Not sticking to the budget.
A frequent mistake of new entrepreneurs is the lack of control over the company's budget. Especially at the beginning, you will be tempted to invest a lot. Remember to do it carefully. Everything should be included in your long-term budget plan. Spontaneous and ill-considered management of the company's fund will quickly bankrupt you. So set a tight budget and don't go over it! Sticking to the established budget will pay off in the future and guarantee you financial liquidity.
9. Registering a company without having any customers
It's best to get your first customers before officially starting your business. Then, step by step, you should expand the network of potential clients and reach new recipients. For the customer acquisition process to bring results, you must build trust in the brand from the very beginning of your business. You will achieve this by obtaining recommendations and opinions on cooperation with your company. Then you can post them on your website as testimonials.
10. Inaccurate definition of the target group
Many young entrepreneurs do not pay enough attention to precisely defining the target group. Failure to accurately describe the customers you want to attract will hurt all marketing and promotional activities. How to avoid this? Create Personas - detailed profiles of potential customers. Thanks to this, you will better understand your target group's needs. Define exactly who you're targeting with your product or services. Then take that into account when creating all brand communication. That guarantees that all content will appeal to your audience.
Example: If you're running a platform with online courses, think about whether you want to speak to teenagers or their parents. Then make sure that all the corporate content you target to your target audience is relevant to your audience. Always use clear and simple language.
Our tip:
Use simple tools for creating personas, such as PersonApp or Make-My-Persona. You can also make such a template yourself.11. No care for customer relationships
Failure to pay attention to nurturing customer relationships is major neglect of novice business owners. At the beginning of their activity, they often focus only on acquiring new customers. Better don't duplicate it. Why? Acquiring new customers requires more effort, time, and money than maintaining long-term relationships with customers. Building strong relationships with your current clients is much easier because these people have already trusted you. So you know their needs and expectations very well. As a result, it will be much easier for you to speak to them than to convince a new group of people. Therefore, it's worth building a mailing database with contacts to customers at the very beginning. Thanks to this, you can create a newsletter in which you will regularly remind all customers about new products in your company.
12. Not using the full potential of the website
No matter if you run a B2C or B2B business, you must take care of the professional website! When looking for information about your products or services, customers will surely visit the company's website and use it to check if they can trust you. Unfortunately, many fresh entrepreneurs forget about the website's potential. In fact, it can be used as a comprehensive marketing tool that helps you achieve various goals. Using the website, you can not only present your brand on the web but also acquire new customers, arrange a business meeting or present your portfolio. Read more about how to get the most out of your website.
13. Not using ready-made solutions
Don't use technology to speed up your work? This is a big mistake! Ready solutions save a vast amount of time and money. Such tools can make it easier for you to perform many difficult tasks, such as creating a website and ensuring marketing automation. The largest companies in your industry certainly use such innovative solutions.
Our tip:
A great example is website builders, which lets quickly and cheaply build a business website without coding or designing from scratch.
At BOWWE, you can easily and quickly build a professional website. BOWWE offers a lot of ready-to-use templates for creating your site. They're fully editable, thanks to which building your website is effortless and intuitive! You just need to choose a template suited to your industry and easily edit any elements using the drag-and-drop.
Is it possible to grow your business without making mistakes?
No matter how much experience you have in running a business, you'll run into problems sooner or later.
The first steps in business are associated with many organizational shortcomings and ill-considered decisions. You can do nothing with that. However, you influence how you prepare for it and react when difficulties arise. Fortunately, you can learn from someone else's mistakes. We hope these tips will help you avoid the common mistakes of fresh business owners. Try to avoid these lapses, and running your own business will become much easier.
About author
Concept21 is a marketing agency with over 12 years of experience. It offers complete services for growing online presence, including Web development, SEO, Market Analysis, and UX/UI Design for micro, small, and medium businesses. Since 2012 the agency has created over 1300 online projects such as websites and online shops for more than 1000 clients. Concept21 is working closely with 26 specialists, 23 contractors and through the best online digital tools.