Most new startups don’t survive long enough to reach their fifth anniversary.
I suspect this is mostly because a large number of entrepreneurs do not realize how much effort and time is required to start a new business.
When you first start thought of starting your business, you probably dreamt of something amazing. Unknown to many entrepreneurs, the first few years consist of a steep learning curve, sleep deprivation and many mistakes.
Even with the most thorough preparation and organization, there are still bound to be challenges on the way. But obstacles become easier if you prepare for them.
Your objective should, therefore, be to become aware of challenges that may arise, and what you can do to mitigate and avoid them.
To help you, here are 5 common mistakes new entrepreneurs make and how you can avoid them.
1. Failure to spend enough time researching your business idea
One of the biggest mistakes that new entrepreneurs often make is failing to fully research their business idea. This is due to the fact that most of them are more interested in just making money than anything else.
How to avoid it:
It is very important to start something that you really like doing since you will obviously be spending a lot of time on it. You should spend all the time you can possibly have working on your business plan. Research fully on your industry including the size, success factors, challenges, economics, and have a clear strategy.
2. Not fully validating the market
Most entrepreneurs think that when they provide a product or service that solves a problem, people with that problem will automatically come to them. However, these assumptions that they rely on are one of the biggest threats to the success of their businesses.
How to avoid it:
The best way to avoid this mistake is going out and having very deep conversations with your customers. Even with a prototype of your concept, you should still be ready to go out and test it. Engage with your customers, know what their problems really are, and what motivates them.
3. Assuming you can do everything by yourself
Due to limited resources, a typical entrepreneur will be willing to become an expert in all fields. However, lack of expertise in the key areas of a business will hinder any meaningful growth within the first few years.
How to avoid it:
Effective delegation is one of the best ways an entrepreneur can build his or her businesses. Identify some of the most important departments in your business that you don’t have full expertise in and recruit the right people. Although this will have increased costs, you will drive more growth by forming a team that is well positioned for success.
4. Underestimating financial requirements
While there are many ways that entrepreneurs can start businesses even with less capital, underestimating financial requirements can hinder it’s potential for success. You have probably heard the saying that everything takes longer and costs more than you expect.
How to avoid it:
To prevent this mistake, invest enough time in all aspects of your business and budget more time and money for them. Even after you are sure you have already built in enough time and costs for them, build more.
5. Thinking you can work longer than everyone else
Every business owner looks for competitive advantage in business. Naturally, entrepreneurs are results driven and want to get a lot done in the least possible time. One of the easiest ways to achieve this is working for longer hours. However, doing this leads to very many negatives results. Being tired means less than optimal performance.
Hot to avoid it:
Working smarter is much better than working for longer hours. When you are well rested, you are also happier and active thus more efficient. On the other hand, you can create more time by reducing time killers like long meetings.
Conclusion
As a new entrepreneur, it is common for you to go through various hurdles and make a few mistakes during your first few years. The only key to avoiding these mistakes is by learning from the experiences of more experienced and successful entrepreneurs. Hopefully, this article will help you become aware of this mistakes that may hinder the success for your business and make an informed decision whenever they arise.
