Being an entrepreneur is a journey full of mistakes and learning experiences, and I believe that life is too short to learn everything from your own mistakes. Therefore, I’m going to discuss common mistakes made by entrepreneurs.
Wrong reason for being an entrepreneur
The biggest mistake new entrepreneurs make is picking the wrong reason to start a company. Many people choose to start a business simply because they are frustrated with their jobs and owners. Making a better society should be the reason for being an entrepreneur. Becoming an entrepreneur is more frustrating than any job because you have to face challenges and solve them yourself.
Lack of Industry skills
Entrepreneurs must have the necessary skills. New entrepreneurs try to enter the industry without the appropriate skills. I see entrepreneurs with sales experience trying to open a tech startup. Their startup often fail because they eventually encounter technical challenges beyond their expertise. Yes, you can learn technical skills, but it will take years to learn and practice. They don’t understand how markets and industries work. Lack of industry skills eats away the entire business, and entrepreneurs shut down their business.
Starting without emergency funds
99% of entrepreneurs do not have emergency funds when starting their businesses. They invest all their money in business and then realize that they do not have money for their livelihood. The situation worsens when they have to dip into these funds for emergencies. Entrepreneurs reach a position where they choose between lending and leaving the business. Most entrepreneurs choose to close the business. Those who opt for loans are usually in the worst-case scenario.
Starting up without testing
People are so confident about their product that they do not test it even once. Entrepreneurs realize that the business model is not sustainable after spending months and years on a project. We have thoroughly explained in our recent article how you can test-drive your startup idea for like 50 dollars within days. Always start with testing and building your product based on the feedback.
Micromanaging Work
New entrepreneurs have this passion for doing everything on their own. But, they don’t realize that they have spent their precious time on things that anyone could have done. This practice burdens you.. Time is limited, and an entrepreneur should use it wisely. Try to outsource things that are not on priority or are outside your skills.
Unmanaged Finances
Managing finances is a crucial task for startups. We all know how important it is to raise funds and fasten the growth. Since most entrepreneurs lack financial expertise, they often misallocate funds, either spending too much or too little. It impacts the growth and expansion of the business. Making rules-based finances is a great approach that every entrepreneur should adopt. That is where startups should reach out for the help of experts.
Hiring the wrong team
Entrepreneurs usually make mistakes in hiring the right team. There can be multiple reasons like skills set, moral values, the purpose for hiring, wrong pay scale, and many more. One wrong hiring can impact the productivity of the entire team. And, hiring an unskilled friend is the biggest mistake that an entrepreneur can make. I suggest you outsource the hiring process for shortlisting the candidates you can interview. Also, having an HR team is not recommended because that is not cost-effective initially.
Product Pricing
When you are building a new product, you are likely to make mistakes in product pricing. Almost every entrepreneur gets confused while pricing their product, and they make it too high or too low. The best way to price your product is by matching it with industry standards. Another easy way of pricing your product is by calculating the cost and adding a profit margin.
Not making products for users
One of the reasons for failing in entrepreneurship is building what you think and not what people want. New entrepreneurs tend to make products around their problems. This approach is frustrating as they create products ideal for themselves, not for the market. In the end, selling the product becomes challenging, and ultimately they shut their business. The best way is to launch a Minimum Viable Product and improve it on customer feedback.
Lack of research on Competitors
All new entrepreneurs think that they have a unique idea without competitors. This overconfidence kills their ambition when they find out about the big players in the market. Remember that somebody is always working on the same idea as you do. There is a reason why they have a larger share than you. Instead of running away from competitors, you should take inspiration from them.
Delay in product launch
New entrepreneurs want to launch a flawless product in the first place. Building a perfect product takes time, and the product launch gets delayed. I suggest all the new entrepreneurs launch an MVP, a Minimum Viable Product. The customers will tell you about the perfect product. There is no shame in learning from customer feedback. The sooner you launch the MVP, the sooner you will make a better product. For example, WhatsApp did not have voice and video call features, but WhatsApp improved itself over time.
Try to do a lot in a short amount of time
Like I said in the beginning, entrepreneurship is a journey. New entrepreneurs try to achieve overnight success, which is rare. In this race, they try to do too much in a short time. This rat race is the reason why new entrepreneurs make so many mistakes. One should understand that every work has to complete its course. For example, Amazon started as an online book-selling store, and it grew gradually.
I hope that you have learned something through this article. Don’t worry about making mistakes, but don’t be a fool who keeps making mistakes. An entrepreneur should love solving the problem and not chasing the money. We all work for money but appreciate the process, and the money will follow you. Since you have enjoyed this article, I encourage you to share these insights with your fellow entrepreneurs.