Posted by Deepshikha Shukla
January 4, 2021 | 5-minute read (969 words)
Every entrepreneur is bound to make mistakes here and there, but if you know the most common issues among new businesses, you can work hard to avoid those. Identifying these mistakes in advance can help you learn from others' experiences, giving you a competitive edge. Check out some of the most common startup mistakes that new business owners make, along with tips on how to avoid them.
Starting the Business Without Planning
A business plan is an essential entity that lays a strong foundation for your company to grow. Starting a business without any planning is a common mistake that entrepreneurs often make.
To launch your business the right way, plan every next step, build the company based on those benchmarks, and get feedback from customers or other advisors. Then revise the plan, implement, and repeat. In the early stages of your business, keep up this cycle of building, executing, and getting feedback to avoid costly mistakes.
Choosing the Wrong Team or Partner
Hiring incompetent employees can reduce the overall performance of your team and limit ideas and diverse opinions. So put in your best efforts to pick the best fit for your business from the beginning. Also, be careful in choosing a business partner or co-founder. You need someone experienced who can complement your entrepreneurial skills, support your ideas and make the right decisions.
Overlooking the Importance of Sharing Ideas
Many startups build their products and don’t talk about them or share them with anyone for fear someone else will steal their idea. Working in isolation or not sharing ideas can make entrepreneurs unaware of the best practices they should employ.
Discussing your business idea with other leaders and mentors can help you improve your product or service quality and build new business relationships. Get to know other leaders’ successful strategies and working styles, and use this information to help your business thrive.
Taking a Passive Approach to Feedback
Entrepreneurs often ignore customers’ responses, although consumer feedback can help them spot their weaknesses and understand customers’ expectations. To keep up with the dynamically evolving market, evaluate your business by asking customers to give feedback. Getting this type of information from the nascent stage of your business can help you improve your products or services early.
Not Keeping up With Market Trends
At any point, the driving components of your business could change. But you don’t know what will change and when, so you should think about multiple uncertainties while making your business decisions.
You can only keep up with the market changes if you stay updated about current trends. Preparing dynamic business strategies can help you lower the costs of making a change. The lower the costs, the more you'll be able to seize opportunities, and the less likely you’ll be affected by incorrect decisions.
Trying to Manage Everything Yourself
Being a leader comes with a host of responsibilities, so it’s common to make mistakes. With strategic planning and organization, you can handle your business yourself. But if you lack the time to manage everything, you should hire, delegate or outsource a team to save time and focus on more important tasks.
Focusing on Growth Only
Not implementing solutions promptly when problems first arise may lead to larger issues. If you're focusing on growth only and not on quality or issues, this can impact your business eventually.
Achieving a balance between business growth and quality is the key to success. If your product quality and customer service are magnificent, people will notice and provide opportunities.
Underestimating the Importance of Technology
You can’t keep up with the competition if you don’t make the most of technology. Irrespective of the nature of your business, technology can help you reach your customers faster. Modern software tools and technologies can make it possible to automate repetitive tasks, thus increasing your business efficiency and productivity.
Investing too much in your workspace, hiring or infrastructure can affect your business negatively. Many leaders either make bad investments or lose money in an attempt to acquire extensive resources. Hiring or outsourcing a CFO can help you make the right financial decisions and avoid mistakes. A CFO can help you understand which investment opportunities are worthwhile.
Making Promises You Can’t Keep
You may not be able to keep your promises if you say yes to everything or don’t know when to say no. Therefore, if you get a business opportunity, first learn the availability of your resources (time, money, people) before promising services or solutions. Planning your resources without prioritizing can lead to a waste of those resources. You can deploy your resources effectively by using the 80/20 Rule (Pareto Principle).
Ignoring Social Listening
The world of marketing is evolving, and it’s becoming challenging to ensure that your business gets the exposure it needs to thrive. Listening to what’s being said about your company on social media is imperative to your growth. “One of the savviest ways to build early traction for your startup is to double-down on social listening for lead generation,” writes Tech from Vets President Jeff Shuford. “Use everything from SocialMention.com to Reddit search and Twitter's advanced search.”
Not Identifying Your Target Market
Without knowing your target audience, it’s impossible to market to the right group. You’ll waste money by throwing your message out to the whole world, and you could even damage your reputation this way.
You must know your target audience to reach them and form a bond with your customers. Perform careful market research to identify your target audience, and advertise directly to those people or businesses. Successful entrepreneurs focus on dynamic marketing strategies that address their customers by choosing the platform that’s most engaging. The best time to perform a market study to determine the efficacy of your startup is at the ideation stage.