Few years ago, technology has leveled the playing field and propelled an entrepreneurial revolution. As anentrepreneur, you now have more access toinformation that enables you to make moreintelligent choices more quickly. Many new business owners dont make it out of thegate because as soon as they fail, they quit right away.
As a new beginner entrepreneur, its hard toavoid certain mistakes, especially when you face a situation for the first time. In fact,many of the following mistakes are hard to avoid even if youre an old hand.
Here are some commonmistakes that entrepreneurs make:
a) Too EntrepreneurialCertain characteristics of entrepreneurs arenecessary for them to be successful. But ifover-indulged they can lead to big mistakes. These include the tendency to be tooopportunistic and not be sufficientlyselective and focused; to be too optimisticand miss or ignore the warning signs; to betoo impatient and expect too much too soon.
Entrepreneurs usually have great confidencein their instincts and consequently rely on"gut feel". The mistake is to neglect orignore market feedback and analysis of thefacts. Being action-oriented, the tendency isto react and "fire" before the "ready, aim"stages are complete. Painful surprises canresult.
Many successful entrepreneurs haveachieved a lot based on their energy, charm,charisma, and persuasiveness, but then getcaught by selling on personality, not onperformance. Clients start to notice thatexpectations are not being met.All these mistakes can lead to seriousconsequences, as a result of being "tooentrepreneurial".
b) Lack Of Strategic DirectionAnother consequence of the action-orientedentrepreneurial approach is the tendency toget lost in the daily details and completelyneglect the original strategic plan andobjectives. The owner-manager soonbecomes pre-occupied by operatingdecisions and all the demands on his timefrom customers, employees and theconstant fire-fighting. It leaves little timefor fire prevention.
c) Lets Do It AgainAnother common mistake that can havedevastating consequences on the businessis the over-confident entrepreneur whoconcludes, "That was easy, lets do itagain!" So he or she leaps into newmarkets, new product lines, or even a newbusiness or investment opportunity.
d) Focused On ProfitBeing focused on profit doesnt seem like amistake. After all, isnt that the wholepurpose of running a business? No, actually. The primary financial objective of anybusiness is "to enhance long-termshareholder value." Many short-term profit-oriented decisions can hurt long-term value.
Examples are many: cutting staff;maintenance or marketing expense; notupgrading systems and technology;accepting high credit risk or low margincustomers; avoiding taxes; environmental orquality issues. Most entrepreneurs are veryfocused on managing the bottom line bymonitoring sales, gross margin andexpenses. They always know thosenumbers.
e) Neglecting Key RelationshipsThe key relationship for any business is theone between its owners and the staff.Management and employee communicationsare essential to business performance andoften not managed very well. Keyemployees need to be recognized andengaged.
Mistakes made with key employees canjeopardize the whole business. Similarly,dont make the mistake of being distractedby the most annoying and persistentcustomer. Your biggest customers are notlikely the "squeakiest", just the mostimportant. Dont make the mistake ofletting them be neglected.
f) Poor Marketing & SalesYou know there is a problem brewing whenyou hear the entrepreneur explaining that"The product sells itself", or "Price is all thatmatters", or "Our Sales Reps need to do abetter job". These are signs of poormarketing and sales results.
Usually the company is failing at both thestrategic marketing level and at theexecution of effective marketing and salesactivities. Not only are opportunities forprofitable growth being missed, but thecompany may be on the downward slide to"out of business" without a well-conceivedmarketing plan and effective salesstrategies.
g) Personal DistractionsPersonalities and their issues can seriouslyaffect business performance regardless ofwhether they are owner, management orstaff issues. Sometimes they are simplyignored until they become a problem.Sometimes they are a result of too muchsuccess and behaving like a rock star.Family businesses in particular run the riskof favouritism and having family mattersinterfere with business success. Managingpersonalities and corporate culture are aparticular challenge in family businesses.
Everybody make mistakes. To avoid some mistakes in the future, before starting to build your own business it sometimes helps to ask good questions ahead of time andseek help from those who already successfulin their business. Successful entrepreneurs are born every day and that you too can bea successful entrepreneur by developing the skills of success. Business Growth Consultant