5 Startup Mistakes every Entrepreneur should Avoid!
18 May 2015
Becoming a successful entrepreneur carries the prestige not only of having financial stability but the recognition as being part of the minority who have reached the pinnacle of the journey. Statistically, less than 50% of entrepreneurs are still in business after five (5) years. The number gets exponentially smaller as tenure approaches 10 years. Just like every journey, the key to success can be found at the start; before the endeavor commences. Here are five (5) mistakes entrepreneurs should avoid on the road to success:
1. Failure to seek advice. According to small business statistics, the number one reason most entrepreneurs fail is mismanagement due to inexperience. Running your own business is not the same as working a 9-to-5 job. Sure you develop a sense of responsibility by fulfilling your job obligations, but when you are running your own business your sense of duty increases exponentially simply because the stakes are higher. The rewards are greater but so are the risks. It takes a different mindset and orientation to become a business owner. Always seek the advice of people who are reputable and have succeeded as entrepreneurs. More often than not, successful entrepreneurs have gone through the same journey and are more than willing to share their experiences with you.
2. Not having a purpose and vision. Purpose answers the question “why” as in “why are you in this business?” If you don’t have a purpose in your business, how would you know what you’re supposed to do in order to succeed? To profit is not a purpose because no one enters a business to lose money. Purpose is not the same as objective because you cannot equate purpose with numbers and figures. Rather, purpose provides the underlying foundation of your business; it fuels your enterprise to reach those objectives. Without purpose, you will be like a ship sailing aimlessly into unchartered waters.
3. Not acknowledging the reality of failure. In this day and age, people still believe that as long as you design the perfect plan, nothing will go wrong. What they don’t understand is that the perfect plan is no longer possible at a time where business has become globally interconnected by technology and former barriers to trade and economics have been torn down. Business is more unpredictable and the probability of failure is much higher. The risk of failure has always accompanied business but more so now than before. If you do not acknowledge failure, then you will not recognize its purpose which is to make you better.
4. Doing everything. Entrepreneurs want to be involved in all facets of operations because they want to be on top of everything. But by doing so, they end up mismanaging their time and compromise productivity. In truth, there are no non-essential tasks in business. But entrepreneurs should know how to allocate their time between tasks that deserve their expertise and contribute directly to revenue. Organizational tasks are best left to those with the experience of managing these types of work. Delegating work to others frees up time for more valuable activities. The end result is greater productivity.
5. Poor fund management practices. Most entrepreneurs start out their business with limited capital. Somehow they misconstrue sound money management practices with either penny pinching strategies or unjustified spending decisions. In order to manage your funds, you have to keep track of your finances by referencing key reports such as the cash flow and income statements. Second, you should develop an understanding of which cash disbursements constitute an investment or an expense. Finally, you should learn to prioritize items according to which ones can potentially generate returns to your business. Holding tightly to your funds will affect your financial flexibility and productivity as much as handling them loosely.
As you can see, it takes more than intelligence and experience to become a successful entrepreneur. More than these, it takes character; the ability to extend oneself beyond limitations, accept weaknesses, dedication to become better and to stay focus despite the pitfalls.
Felix is an entrepreneur that has learned a lot from his mistakes. He takes mistakes as something natural and positive. Currently, he’s working with OutsourceWorkers.com.au. You can connect with him on Twitter.