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The 10 Mistakes That Failing Entrepreneurs Make

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Article Overview: You have heard that many businesses fail in the first few years. You want to set up your own business and are sure that you won’t fail. So what are the mistakes that the entrepreneurs make?

The 10 Mistakes That Failing Entrepreneurs Make

You have heard that many businesses fail in the first few years. You want to set up your own business and are sure that you won’t fail. So what are the mistakes that the entrepreneurs make?

1.) Believing that you will make money quickly.
Starting your own business is hard work and it usually takes a long time to become profitable. Read some of the entrepreneur millionaire’s biographies and you will learn that they had to work hard and long before they became rich. If you believe that your will make money quick you are likely to soon become disheartened and put less than the required effort into your business. You should concentrate on having a good steady cash flow and control both your costs and the time taken to receive your money from your customers.

2.) Starting a business with not enough money.
Just as a successful business needs time, it also needs money. You should budget for at least 6 month’s personal bills and company expenses plus a little bit more. If you are not worrying about paying your living expenses you can concentrate upon developing and running your business.

3.) Believing that everyone wants what you are selling.
One of the biggest mistakes people make is to believe that just because they and their friends like what they are selling everyone else will. Market research is so important it should be the first thing that you do. Before you start your business in earnest you must make sure that what you are selling has a good market at the price that you want to sell it for.

4.) Not planning or strategising.
It is that old adage – “Plan to succeed or succeed in failing”. When you sit down and decide to start your own business it is important that you plan what your business will look like, how it will behave in the current market and what you will sell, at what price and how. At the very least you should have a Business Plan which contains your business model, your financial strategy and your marketing strategy.

5.) Thinking you will get on the shelves of Walmart or Tesco.
This is the big one – I am continually coming across people with a great sauce or new gizmo that they think they will be able to get straight into the major supermarkets. Not only will they not be able to cope with the manufacturing levels that these kind of companies require, but these large companies are able to squeeze profit margins until the small company can hardly breathe. Even if a small company can cope with these demands, the chances that they can even get in front of large company buyers is very low. Small companies must start slow and build up their capabilities and their customer base.

6.) Burning all your cash.
This was a problem that caused many a business failure in the internet boom period and where the term “the burn” was coined. Burning all your cash means spending all your investment at a great rate. It is very tempting when you start your new business to spend all your investment very quickly on things such as large office, latest office gizmos or too much stock. Make a plan as to what the least is that you can do with and then reward yourself with bigger and better as you grow your business. You keep your cash slow under control as well as giving yourself an incentive.

7.) Concentrating of making money.
Often, even in an established business, entrepreneurs get into the rut of just thinking about making money. Whilst this at first site, seems a good theory, it means that efficiency and growth is forgotten. It may be that spending time making your time making your business more efficient may make you more money. Similarly you may find that will you look down from your making money treadmill and discover that your competitors have taken all your market share by their sustained growth.

8.) Thinking you can make a profit part time.
So many people think that having your own business means that you only work part time. In fact the opposite is true. Starting a business is hard work and takes a lot of time so you should be prepared to put in the hours.

9.) Not balancing your spending.
When you first start a business and you are still learning, a common mistake is to spend too much on one item such as stock, staffing or advertising. It takes a while to learn what works most profitably for your business. There are set gross profits that each type of companies should strive for and your accountant will be able to advise you on these. Having too much stock is a common mistake as is spending too much on staff before they are needed. It is a fact of life that entrepreneurs need to be a master of all the jobs in their business – and they learn these skills “on the job”!

10.) Not being organised.
Organisation means that everything that you do becomes so much efficiently, easier and ultimately more profitable. Work out how you will handle enquiries and send out products that you have sold. Set up some standard letters, invoices, your accounting and some standard books like a message book and work book. Set yourself goals and write to- lists so that you manage your business and the effort that you put into it.

Lastly don’t panic and enjoy yourself. Good luck!

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Article Tags: biographies, business model, business plan, company expenses, current market, enough money, entrepreneur millionaire, financial strategy, first few years, little bit, living expenses, long time, market research, marketing strategy, old adage, personal bills, starting your own business, steady cash flow, successful business



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