Everyone has a business idea that if provided with adequate capital, and everything else they require, they will be well on their path to entrepreneurship. However, there is a big difference between having an idea and executing the idea.
A business idea may sound easy and straightforward but most new entrepreneurs are hit with a rude shock of how tough it is to get a business up and running.
Here are six common mistakes new entrepreneurs make and tips on how to avoid them.
1. The ‘I can do it all attitude’
A new business idea is like a baby, you want to cuddle it, stroke it and protect it from anyone who shows up to critic your idea, give you a list of reasons why your idea won’t work or even explain vividly how it will be impossible for you to implement the idea. These often makes new entrepreneurs shy away from sharing their ideas and involving other people in the potential business.
The feeling of, “Since I came up with the idea, I am best placed to implement it and have it come out exactly how I want it,” takes over more often due to pride or fear that bringing in and listening to others will corrupt your original idea. However, instead of helping, this might slow down your implementation or result in you getting stuck along the way.
TIP – As much as it is not advisable to listen to everyone’s opinion about your business, it is important to seek a mentor preferably one who is successful in the same business you want to venture into. Potential customers are also key as they are the ones who will make or break your business, reach them through a market research strategy such as questionnaires to find out how your product will be embraced in the market. All in all, listen selectively sieving out useful suggestions from those that won’t help the business.
2. Focusing more on the idea and not the execution
Every business startup starts with an idea. Now ideas are great, but your potential customers will not buy an idea neither will investors put their money in an idea that doesn’t have an executable solution. Most new entrepreneurs get stuck at the idea stage. They spend months talking about how great their ideas are, how it’s going to make them lots of money and change their lives forever but they never really take the first step of execution.
TIP – Do you have that genius business idea you have been sitting on? It’s time to begin drafting an execution plan. To start you off, ensure you have a business model with a clear value proposition based on current market dynamics, an innovation that does not necessarily have to be new but should have a unique solution compared to what is currently in the market and a growth model that guarantees a great profit margin in order to attract investors. When you have these, take your first step, whether it’s designing your new website or setting up that first pitch meeting with your first potential investor.
3. Being short sighted with your first profit
Depending on the amount of work and commitment you place in your start up in the initial stages, your business might reward you with a huge profit. However, the decisions you make at this stage are crucial for the long term success of your business. As much as you are justified to treat yourself as a business owner at this stage, making financial choices such as taking a fully paid vacation to Zanzibar or buying your dream car could prove costly for your business.
TIP – Growing a business requires setting short term and long term goals. Both goals should help you achieve your overall vision for your business. Some tips on how to use your first profit wisely are;
• Re-invest back into your business based on your strategies.
• Invest in marketing strategies both traditional methods and digital methods based on your target audience.
• Invest in a more qualified workforce in order to have a productive team.
• Investing in yourself by taking more business courses and learning new skills that will better your business
4. Dwelling too much on failure
When it comes to turning your business idea into a startup, it’s not a matter of if failure will happen but when. Failure is inevitable, whether it’s making a wrong business move that suddenly makes you bankrupt, hiring a rogue contractor that ends up damaging your systems or your business partner walking out on you. Whatever it is, it is bound to happen sooner or later and dwelling too much on it won’t make it any better.
TIP – Rather than having a fear of failure, it is important to prepare and plan for it so as to recover much faster. The good news is that once you overcome a failure in your business and pick up valuable lessons from it, you become stronger, your business benefits from it and you set strategies to prevent the same from happening in future.
5. Trying to maintain your normal lifestyle
Has your life always involved Friday evening dates with friends, watching and following up all Premier league matches or never missing out on all the latest parties and concerts in town? Well, if you have chosen the path of entrepreneurship, you should be ready to make major changes including working longer hours and focusing more energy on your business compared to your social life.
TIP – One thing entrepreneurship does is make you more focused since you now have this new responsibility, extra bills to pay, investors holding you accountable and people looking up to you every month for salaries. For your business to make it through the first years, you need a strong network of friends to support you. Despite the sacrifices you’ll need to make, always think long term.
6. Thinking you have no competitors
Due to the initial excitement of a new business idea, most new entrepreneurs get carried away by their idea and they think they have no direct competitors or their idea is way better than current solutions in the market.
However, the reality is no matter how innovative your idea is, someone else is most likely to come up with a better idea. The competitive business environment in the 21st Century also makes it quite challenging to monopolize a certain market because once people see how great you are doing, they will quickly pick out your weaknesses and come up with a better product/service.
TIP – To be on the safer side, do adequate research on competition before launching your business. Ensure your business has a better value proposition and your business model fills a gap in the market.