One of the great mysteries of entrepreneurship is why businesses fail. Failures are a part of life, but this part of life is not acceptable to everyone and the worst part about it is that the entrepreneur is unaware of it happening until it is often too late. The common mistakes that every entrepreneur makes are spending their capital on building unnecessary infrastructure, investing money in wrong directions and not focusing on sales. There are many who blame lack of funding, but it’s typically a lack of systems. So, if you are planning to start a new business do have a look at some of the common mistakes of entrepreneurs that became the reasons for their failure.
1. No written plan or blueprint.
Never believe in the myth that the success of a business is based on the decision made through instincts. Planning is the most essential element in a business. And do not plan verbally because you may forget to mention a few things and even worse you may forget what you have planned. So, it is important for you to make a blueprint. It will not only help you to work systematically but will also help you to make changes in your plan accordingly. The discipline of writing down a plan is the best way to make sure you actually understand how to transform your idea into a business.
2. Seek money before adding value.
If you are starting a business with the perspective of earning money and you forget to bring quality to your product, then obviously you will have to face failure in your business. Never make money your primary motive of beginning a business; try to bring quality in your service, create your brand strategy and target your market. Only then will you save your business from its downfall. The purpose of entrepreneurship is not the accumulation of money but the creation of value-adding products/services for your customer.
3. Do not try to do what others are doing.
We should always do something we are good at, not what others are doing. Don’t just start any business because someone you know has started it and is running it successfully but start the business because you know how the market works and how to ensemble things for a better outcome. Always ask yourself about what you know better than anyone else, not what your friend is doing or what other people want. Be yourself and know exactly what you want because trying things others are doing well will only harm your business.
4. They don’t know what true hard work actually looks like.
Sometimes entrepreneurs don’t know what true hard work actually looks like and don’t make the effort. This eventually leads them towards failure. But, if we actually work hard we can achieve entrepreneurial success despite all odds. It was the hard work of Atul Gupta, from the Gupta family, which made him one of the most successful businessmen in South Africa. We can actually look at his achievements and take business tips from him.
5. Inadequate knowledge of the market.
You need to do research about the market in which you are interested in. Gather all the necessary information about the market before entering. This will help you in planning, whereas the lack of information will let your business down. The fact is that how much you can make is a function of how much you know. Have full knowledge about the market trends, requirements, customer demands and act accordingly. Try to attend conferences and parties with businessmen to know about the latest trends and technology they are using. But in order to save time and energy, entrepreneurs don’t usually do market research and therefore, they fail terribly.
6. Leadership failure.
Most businesses fail because of a poor quality of leadership. It is the leader who decides what to do, when to do things, where to do things and who will do it, therefore he/she must be capable of making the right decisions at the right time. From financial management to employee management, leadership failures will trickle down to every aspect of business.
7. Marketing failure.
Marketing is one of the most essential elements of a business. Without marketing, you will not be able to sell your product/service, therefore, this will push you towards loss. Most of the quality products fail to reach customers due to lack of marketing. Many entrepreneurs don’t even know how to invest money in advertisements and promotions.
8. Lack of focus.
Stay focused because without it, your business will lose its competitive edge. If you are focusing on expanding your staff then stay focused on that and do not think about opening new branches of your business or neither of the goals will be proven successful. Your main focus should be on planning and creating new ideas. But the problem with young entrepreneurs is that they cannot focus on only one thing and will have their mind everywhere and this becomes a problem.
The simple agenda that must be followed by an entrepreneur is to make sure that he/she learns from their mistakes and tries to avoid them in the future as often as possible. Most importantly, remember that a startup business or a growing business is no different than a child, so it needs constant care and attention. Therefore, stay focused and try to work according to the current market situation.
