The decision to become one’s own boss is one that comes with a lot of privilege and freedom, but also extremely taxing requirements. One has to incur endless hours researching an idea, planning the details and looking for base capital.
And after the business becomes operational, there are a lot of hard decisions to be made. This is a continuous process as long as one is in business, and only gets harder with time.
Here are some of the key mistakes that start-ups make that could best be avoided to boost chances of business survival and success:
1. Not preparing adequately
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Many people enter into business very green and with a very casual mindset, and fail to draft business plans. This would undermine the operation of a business, essentially making every move guesswork.
An entrepreneur should have adequate information on what they intend to do, how much they plan to invest, the target market, the investment needed, marketing strategies and alternative, or insurance plans in the case of unexpected disaster.
2. Underestimating the need for marketing, or using wrong marketing tactics
No matter how good the products and services you sell are, they won’t sell if customers don’t know that your business exists and what it sells. Again, not all marketing methods used could improve a business’ market potential. A business person should ensure that they constantly advertise their products in the media that can best reach their targeted customers and partners, while leveraging on technology.
They should avoid over-reliance on certain forms of advertising by developing a carefully thought out, well-rounded marketing plan for the business. This plan should cater for the target audience, the exact message to be passed, the medium (or media) to pass the message, and factors such as the cost to be incurred in the advertising.
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3. Not paying for expertise
Sometimes entrepreneurs new in a field want to do it their way. Some of them plainly do not want to pay for expertise because they want to save every coin, and would rather go into trial and error. But this might end up being an undoing for the business. Experts offer a clear route to success and can save businesses a lot of stumbles that would cost businesses crucial time and money. Hiring of expertise could be a masterstroke that sees the business avoid costly mistakes.
4. Failing to delegate aka micromanaging
An entrepreneur comes into business clasping onto their idea, knowing that it is their risk, and thus their reputation that is at stake. As such, the feeling is that they have to be present when everything is happening, or they have to do it themselves, in their chosen way, unadvised.
Failure to delegate comes as a big problem to businesses as lack of brainstorming, or lack of allowing other people to also bring in ideas into the running of various business departments means that the variety of ideas and opinions is limited. A one trick pony always gets caught up by misfortune soon.
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Again, as business expands, a boss cannot do it all. The work, at some point, becomes overwhelming, and the need for assistant managers absolutely necessary. A start-up entrepreneur should entrust knowledgeable people with various departments.
5. Desire to be “the cool boss”
In a bid to please employees, customers and other partners, the boss might find himself or herself making decisions that do not suit business progress and continuity. Oftentimes, people who employ their family and friends fall into this trap; making decisions to keep everyone happy and to earn the tag of ‘the cool boss’. But that does not ideally work for business. Businesses are all about service delivery and profits.
Business owners should make sure to balance, keeping employees and customers happy while making rational decisions in the best interests of the business. The customers and employees might be happy but if losses are being made continuously, then business will collapse and the entrepreneur and his happy partners will go home empty handed.
6. Being inflexible
In a highly competitive marketplace that is getting even busier by the day, start-up businesses need to stay focused, but also aware of changing marketplaces and alternate approaches to attain goals. The business should be ready to adapt to change caused by relentless disruptions that are inevitable in the marketplace.
If things completely go south, then a business venture should be ready to shift to what is immediately more marketable, before waiting in line to carry on making losses.
To survive in the face of endless disruptions, most business owners opt to diversify their portfolios. An entrepreneur should seek to establish a venture with the knowledge that the markets are unstable and what is trending today might lose taste tomorrow.
7. Being on the back of emerging trends
In their efforts to make a sudden impact on the market, most start-ups tend to ignore emerging market trends and their longevity. Some might have succeeded by jumping on hottest trends, raking in quick-fire profits, but there are many start-ups which fail as soon as the trend, and hype, fade.
Following latest business trends could be two-edged and is quite risky, especially if one does not have required expertise about forecasting future trends, or if one’s research of past trends and their direction is not good enough.
If one wants a start-up to survive long, then one should have a clear business strategy that enables one to be adaptive to changing dynamics of the market.
8. Being ignorant of tax laws
The biggest legal mistake that countless start-ups make is remaining ignorant of tax laws and how they can be exploited for a profit, or how they can come back to haunt a company in the case of defaults.
Knowing where to incorporate and where to base one’s business operations could end up being the difference between a start-up in the black and one that’s struggling to make a profit.
A potential business owner should dig deeply into regulations and arrive at a comprehensive understanding of the legal business environment before creating a start-up. In doing this, the business person will avoid some of the biggest legal mistakes that countless other entrepreneurs are wont to make.
9. Not allowing self and employees rest, and fun
Business should not be a punishment. There is need for employees to take a rest and refresh. Even machines need oiling. As such, retreats, rests and other incentives to take a break should be prioritised by any business owner. When everyone is happy, the business will definitely thrive. Wonder why everyone wants to work at Google?