5 Business Mistakes Entrepreneurs Should Avoid
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Congratulations! You’re finally stepping into being a business entrepreneur to startup a small business or company of your own. You’re ready, spirited and full of energy to introduce your million dollar idea to be the next best entrepreneur in the business industry.
But as a new entrepreneur in the game, you might make business mistakes along the way, which could eventually lead your launch to a business failure. Hence, there is importance in the course of action before starting your business. (Read: 10 Important Steps for StartUp Business in Malaysia (Year 2021) . Here, we’ve listed five common business mistakes to help you hedge such potential business mistakes that might get in your way and to help you build a successful business.
Mistake #1 – Always building and never planning
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You might say, “That’s what an entrepreneur should do – keep innovating ideas!” That’s totally right, and we agree with it 100%. But entrepreneurs often forget to place plans before execution. It’s just like the infamous saying, “If you fail to plan, you plan to fail.” Especially if you are new to this venture, placing your ideas first before having a solid business plan may be your biggest mistake!
Ways to avoid:
DO NOT skip over your business plan! Laying out a solid business plan is as equally important as delivering your product/service ideation. The written piece of document is basically your long-term blueprint to success because you will be discussing your business financials, direction, purpose and even your target audience.
Do plenty of research about your industry, competitors, potential and existing customers, and the current market demands. In order to know if your business idea will work in a particular industry, understand who you are building it for, how you are going to build it and what you will need to build it.
Mistake #2 – Unwilling to collaborate and hiring too early
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Scenario 1: You’re a new small business owner but wants to venture into the market independently, so there is no need to find a business partner.
A common mistake of new entrepreneurs is to do it all by themselves. They are often unwilling to get a business partner because they may risk partnering with the wrong person, which may pivot the original envisioned business plans. But having a co-founder or a business partner is essential to attract investors! Investors are more likely to fund businesses with multiple founders as compared to fund a solopreneur.
Scenario 2: You’re a new small business owner who is desperate for help and manpower to expand the team, so you hire a few too many employees.
This is a costly mistake by new entrepreneurs and small business owners! Not only will this cost you financially, but it may also even cost you your whole business foundation when you hire too soon. Sometimes, you may think you have got the right person for your small business when really, they don’t actually fit into your operations.
Ways to avoid:
Reach out to people in search of a co-founder(s). From there onwards, share ideas, create a business proposal structure, discuss marketing plans, gain valuable insight, and build up an agreement with the co-founder(s) until you find a working dynamic for you and your small business. Be sure to have clear communication on the business structure!
Keep your founding team small until your startup business has a clear and solid plan to launch or is ready to expand its manpower. You don’t need extra help when your team is currently able to operate efficiently, and you certainly do not want to spend an unnecessary amount of time and money on employee search.
Mistake #3 – Habits of overspending & underspending altogether
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You may not realise it, but the way you handle your own personal finances may contribute to the causing factor of mishandling money and reckless money management. This is one of the common small business mistakes of a new or young entrepreneur because of their excitement in starting their entrepreneurial journey, which prompts them to do anything it takes to bring their idea to life.
Being irresponsible with the cash flow and funds because you were overconfident with your business idea will only put you in hot water later on. Like Jeff Bezos, founder of Amazon, who overly invested in children’s toys by purchasing 100 million toys to sell, but still left with 50 million toys in the warehouse which had to be given away eventually.
On the other hand, underspending would limit your business potential and its reach for success. Limited funds aside, if you don’t invest in technology such as cloud accounting software or cloud payroll software that would help your business operations, how far can your new business go? (Related: 23 Software Booster for Growing E-Commerce Business in Malaysia)
Ways to avoid:
Establish a habit or a ground-rule to understand your company’s financial health first. It may not interest you when it comes to doing an accounting analysis, but this is so that you are able to make smart business decisions before overspending money that will tighten your company’s financials.
Place your business’s interest before yours. All business opportunities coming your way will always be feasible for you as an entrepreneur, but will it bring your company to success? If yes, money shouldn’t be something you safeguard at this point! Be both cautious and wise when making bold decisions for your new business.
Mistake #4 – Launching at the wrong time
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‘A failed business launch’ is something you wouldn’t want for your startup. What caused the failed launch? Well, surprise surprise – you either took too long to launch or you just launched too soon! Young and inexperienced entrepreneurs would often think launching a startup can be done anytime however, that is not the case.
Ways to avoid:
Question every key area of your startup to see if they are ready. Say, you want to start an online business for example. Ask yourself: What are the setups and preparation of an online business? What processes are needed to be run? Is this a product/service relevant to the market now? Is this an opportune time for my launch? Trust your hunch on the green light and you’re ready to launch!
Stop being a perfectionist towards your idea. Careful, you may get overboard with perfecting your business idea and forgetting all about the launch. Remember, taking too long to launch will only keep your idea from being relevant to the market and you will waste your time in seizing the perfect launch opportunity. Your competitor may just take away YOUR opportunity!
Mistake #5 – Expecting instant success
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Instant success – who wouldn’t love that? Of course, you would want to see quick results on your new business and to be recognized as the next successful entrepreneur on social media!
A common misconception of startups is that they would need to make a ton of money as a measure of success and to be deemed as a successful startup. It is so important to know that there is always another way to validate your small business’s success.
But, what if you don’t get the success you wanted on your first try? Colonel Sanders, who is famous for the secret recipe of Kentucky Fried Chicken (KFC), had failed in selling the now-legendary fried chicken recipe more than 1,000 times. He only succeeded on his 1,010th try. What could’ve been if he had stopped at his 1,009th try?
Ways to avoid:
Be patient and realistic. Nothing is ever instant, not even instant noodles – they need time to cook! Having a startup company does not make you rich overnight, nor will it help you reach a 5-year business goal in 5 days. Know what to expect realistically, where results would take months of progress and effort. Being patient is challenging but it will be rewarding at the same time
Keep creating and planning. Take the next step in your marketing plan. Create the next marketing strategy. Create a marketing campaign to continuously attract new customers. Keep reaching out to your customer groups and potential customer groups on Facebook, Twitter, Instagram, and all those social media outlets! Success will head your way step by step and your small business will evolve with time.
Conclusion
Entrepreneurship is a long and progressive journey with a few stumbling blocks along the way. It will consist of a lot of trial and errors and failure is not a common stranger. As long as you take failure as an identifier of weak spots, you can always learn what works for your startup and what does not.
Best of luck in starting your own small business, we hope you are able to build the right foundation and to start your entrepreneurial journey on the right foot by avoiding the mistakes mentioned above!