The 12 Most Common Mistakes New Entrepreneurs Make & How to Avoid Them

By admin1 • July 7th, 2011

The 12 Most Common Mistakes New Entrepreneurs Make & how to avoid them

A large number of people who start their own business do not realize how much work and time will be involved. They fail to carry out any primary research and as a result become quickly overwhelmed.

Perhaps the first question to ask yourself then is whether you are in fact ready to start your own business. Do you have an entrepreneurial mindset? Are you committed to spend all the time you need to succeed? And are you ready to take massive action?

At first, you will have to wear many different hats; you will be the CEO, the general manager, the accountant, the salesperson, the computer technician, the secretary, the receptionist. You must therefore prepare yourself because there will be days when you are disappointed, depressed, or frustrated. You have to realize that success will not happen overnight. And it may take a year or two before you achieve your expected results.

To avoid these disappointments, here are ‘The 12 Most Common Mistakes New Entrepreneurs Make & How to Avoid Them’:

Mistake # 1 – Failure to spend enough time researching the business idea to see if it’s viable

Numbers of new entrepreneurs have often failed because they were not truly interested in the business; they were more interested in making money. It is important to start something that you really like, because you will be spending a lot of time on it.

Your assignment – Spend all the time you need working on your business plan, which should include: your mission statement, your business strategy, research on your target market (demographics), industry analysis (size, economics, trends, success factors, challenges, etc.), your marketing plan, your financial projections and sales.

Mistake # 2 – Failure to determine whether the business actually adds value

The most sustainable businesses, those that withstand the test of time, provide value by performing a service that people need.

Your assignment – Make sure your products or services provide value and benefit to your clients. Be ready to solve any business problems that your clients may have.

Mistake # 3 – Failure to gain a complete and total understanding of the business

Every business has drivers; hot buttons and key levers. What drivers exist in your business?

Many business leaders, executives and management consultants would say that success largely depends on attention to detail.

Your assignment – Understand all the aspects of your business, and of particular importance, know how to present them in an easy and simple manner.

Mistake # 4 – Failure to describe the business in only one or two sentences

No doubt you’ve experienced the entrepreneur whose business is so technical or complex that he cannot explain the concept in plain English. Or, it takes 20 minutes to convey the purpose of the business. What value or benefits does your business offer?

Your assignment – Have an efficient 15 to 60 second elevator pitch that introduces you, your business’ mission, focuses on the benefits you provide and makes you and your business memorable.

Mistake # 5 – Failure to conduct the primary research

There are many great ideas you can latch on to, but the key in business is to make sure the idea—the central theme or mission of your business venture—can attract customers and generate sales and profits. A great idea in and of itself is not enough to start a business.

Your assignment – Take the time to gain experience, study the business, understand what makes the business work (how to serve the customers and generate profits) and what leads to losses.

Mistake # 6 – Failure to contact professionals who can help you get started

Numbers of new entrepreneurs ask their friends and family for advice when starting a new business. The problem is that they often ask people who have never started a business; so in reality, these people are not in a position to offer sound advice.

Your assignment – Get a mentor or two. Surround yourself with experts who possess skills and expertise that you lack. Team up with professionals who can complement your strengths and cover for your weaknesses.

Mistake # 7 – Failure by underestimating financial requirements

Do you know how much capital you need to start your business? Do you know the market, did you calculate your cost, did you project your sales, do you know the number of clients you need? Do you know how long it will take before you get your first benefits or before you will run out of money?

Your assignment – Invest the time to work on ALL aspects, especially the major ones, of your business before you start.

Mistake # 8 – Failure to make marketing a priority

Many new entrepreneurs start their business without determining their target, niche and demography first and as a result have failed to attract any clients. Marketing should be one of your top priorities. Devising a marketing plan will help you determine how to promote your products or services and create a system that will generate more clients for your business.

Your assignment – Dedicate a good portion of your time and energy to working on and implementing your marketing plan. Set up a meeting with yourself once a week to work on your marketing plan and whatever happens never cancel this meeting; it is essential for your business.

Mistake # 9 – Failure by under-budgeting the marketing costs

Today the world is overcrowded with businesses and probably a number of those in your market perform essentially the same functions as you do. This means that you have to differentiate yourself from them by making your business stand out. Publicity is essential to your livelihood; otherwise you will not attract any customers.

Your assignment – Make sure you have a strategy that puts the word out there. Provide adequate publicity, business cards and marketing materials that project a professional image. Don’t try to save money on these; they are reflecting your business. A cheap business card or flyer will not make a professional impact.

Mistake # 10 – Failure to focus on the business

Many new entrepreneurs are energetic and enthusiastic people (which is essential to success), but they can also be overly optimistic and pursue too many targets and directions at once. This typically results in mediocre results. Define your business’ mission as succinctly and narrowly as possible. When you move in too many directions at once, especially in the early days of your business, you are likely to fail to execute anything correctly; so you end up working “on the business” instead of “in the business.” In other words, you will spend all your time operating each task on your own. You won’t have the time to sit back, and decide on the best way to develop your own marketing plan, create new products, or improve your services.

Your assignment – Know you goals. Put them in writing. Make sure they are realistic, specific and measurable and that you set yourself a deadline to achieve them.

Mistake # 11 – Failure by over-marketing

Once you have developed your product or service and have perfected your offering, you may think that your offering is the best in your marketplace. But unfortunately, to be efficient you can’t sell to everyone. You need to select a specific target market and stick to it. By doing this you will have a more efficient message and will more likely achieve success much sooner.

Your assignment – Carefully determine your niche, your demography, your ideal clients, where they go, what they read, what their hobbies are, etc. Once you have a full understanding of your client’s profile you will then have a full understanding of how and where to find more of them.

Mistake # 12 – Failure to follow-up with clients

Many new entrepreneurs are often so desperate to constantly find new clients that they neglect the clients they already have and in fact end up losing business. Statistics show that it takes seven more interactions to secure a new client than to sell more to a repeated client. So develop and maintain a useful and organized follow-up system to offer new services to your clients and don’t let them slip away.

Your assignment – Constantly and consistently communicate with your current clients.

Start a newsletter, offer special sales, create new products to upsell, join affiliate programs if you don’t have your own products. People who have already bought from you will appreciate it when you recommend other products. Statistics show that up to one out of three clients will take advantage of this new offer. It is essential to build a very, very special relationship with your clients. They are your best audience.

If you have a business idea, but are unsure how to get started, or already own a business, but have not yet achieved the results or success you were hoping for, check out my book: “Start Your Dream Business Today! The Proven 11 Steps to Start and Grow Your Own Business”, a simple yet informative and easy to follow step-by-step guide to everything a new entrepreneur should know when starting a business.

Get it today by going to www.StartYourDreamBusinessToday.com. You’ll also get lot of other ideas and resources to help YOU Start Your Dream Business and I will save you time and lot of money, as I did for my clients.

© 2006 Biba F. Pédron

biba pedron
http://www.articlesbase.com/networking-articles/the-12-most-common-mistakes-new-entrepreneurs-make-how-to-avoid-them-103303.html

Comments

What are the three most common mistakes entrepreneurs make when starting their business?We’ve all been greenhorns once upon a time. What are the most common mistakes that new entrepreneurs make? How can they avoid them?

By shopaholic7_7 on July 7th, 2011 at 4:37 pm

not thinking about what can go wrong. everything can go wrong and some of them just don’t think about it before its too late and they get into a lot of strife.References :

By katyokfau on July 7th, 2011 at 4:39 pm

Many spend too much money on things they really don’t need or take too much money than they can repay in a reasonable time.

They often don’t do enough research to find the right location, market, customer stats, etc.

To avoid, do your research, write a business plan, only borrow as much as you need, and you don’t buy a bunch of expensive stuff you don’t need.References : Bachelors in Business Administration with a concentration in Small Business Entrepreneurship

By mrsgillen3 on July 7th, 2011 at 4:41 pm

They quit too soon!References :

By Mexico4me on July 7th, 2011 at 4:43 pm

1) Fear of rejection
Many suffer from paralysis through analysis, thinking they have
to know every detail before they get started. They are afraid to
pick up the phone in case the potential says no.

2) Unwritten goals
Without writing down goals, they are just dreams. They need
to be written down and broken down into daily tasks in order
to meet them in a timely manner. This is their road map to
success and many don’t realize that.

3) Too much information to potential customers
Sometimes, in our excitement, we talk to much. The
customer becomes overwhelmed and as a way out,
they say they need time to think about it. You need to take
advantage of marketing tools and learn when less is more.References :

By Marcello on July 7th, 2011 at 4:45 pm

COMMON MISTAKE # 1
First and definitely the most critical, not assessing the market. You need to know exactly how your business model fits into the market, who your competition is, and how the supply/demand will affect your pricing. Making baseless predictions on anticipated revenue is the most common and most devastating mistake entrepreneurs make. In your financial analysis in your business plan, ask yourself how you came up with the anticipated revenues.

COMMON MISTAKE # 2
Being underfunded. Plain and simple, you need to properly assess how much you will require to last you a certain length of time if all goes badly, then double it. Time and time again you will find the best ideas with the perfect marketing situation fall totally apart because of lack of funding. Some businesses require little to maintain, and if so, that is part of your assessment, but make sure you know exactly what to expect. Even the least costly business have expenses.

COMMON MISTAKE # 3
Getting involved in foolish things like MLM/Network Marketing that base their entire business plan on hype rather than real world assessments. An entrepreneur who starts a business on the premise of desire for riches as oppose to a strong business plan is destined for failure. Not that desiring to become rich is bad, but if that’s your main reason for starting a particular business, then you are way off base. You enter a business to make money, but you choose the business because its a sound investment of your time and capital. Most people who begin business based on hype fool themselves into thinking that the business model is strong, but this is only rationalizing. Always ask yourself before entering any business if you would be willing to leverage all your current assets on the business plan. This is a great thought provoking question. The point is, if you are convinced of the business plan so much that you think risking everything you own is worthwhile, then you have likely looked into the model enough to know what you have. But if you are leery when asking that question, its likely because now the emotion has been taken out of the hype and you are looking at the business rationally. Again, looking at it rationally doesn’t automatically mean that you know what you are doing, because there are enough people who would risk everything they own for terrible business plans, but at least you are not kidding yourself. You need to never look at business emotionally, those who do find themselves spinning their wheels for a dream that will never come true.

There is so much opportunity in this world that having the right attitude and mindset is your best asset. With a proper business plan and market assessment, you can right your ticket to pretty much anything you want to do.

Best of luck.References : real world business experience and education.

 

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