Becoming a successful entrepreneur takes plenty of smarts, planning, and a dash of luck.
While there’s never a dull moment, entrepreneurship isn’t as glamorous as many people assume.
You have to be committed to continuous learning through reading the right books, engaging with mentors and coaches, and through your own experiences.
Making mistakes is part of the process. However, some mistakes can be fatal to the business.
That’s why it’s important for a smart business owner to learn from the mistakes of others.
Let’s explore some of the most damaging common mistakes entrepreneurs make.
1. Being overly confident with your business idea
Starting a business requires some confidence in your abilities. However, many business owners get so overly confident about their business idea that they fail to conduct proper research and write a business plan. Not conducting research to determine the viability of your business idea sets you on the wrong path right from the beginning.
If your business idea isn’t viable, nothing you can do will make it so. Even investing more money won’t save such a start-up
2. Picking the wrong business partner
Having a business partner can propel your business towards success. After all, two heads are better than one. A good choice in a business partner can give you access to a wider range of networks and expertise and more financial muscle – boosting your chances of business success.
In addition, a business partner gives you another perspective which can be crucial when making important decisions. You also offer each other emotional support to weather the tough periods of the entrepreneurship journey.
A bad business partner, on the other hand, can easily bring down your business.
3. Hiring cheap labour to cut costs
At face value, it makes business sense to hire the cheapest people to your team. However, making hiring decisions based on cost can also backfire on you. Cheap labour is cheap for a reason – they’re likely to be unskilled, inexperienced, and unreliable.
Highly-skilled and experienced employees expect to be paid well for their services. That, however, doesn’t mean that you should hire unnecessarily expensive employees.
Look at what the average market rates for particular roles are in your area and try to offer competitive salaries.
4. Over analysing your ideas
While some entrepreneurs fail to plan adequately, others get caught up in over-planning – which can lead to analysis paralysis.
This makes it impossible to make quick business decisions and seize opportunities as they present themselves.
Analysis paralysis is the cause of many project delays, seemingly endless planning sessions, and slow movement between production stages.
Spending too much time gathering information can easily turn into stalling. Be flexible enough to learn from your mistakes and course-correct where necessary.
5. Pricing your products wrong
One of the important choices you will need to make for your business is the pricing of your products. Every area of your business will be affected by the price point you select, including cash flow, profit margins, salaries, and which costs you can afford to cover or not.
Pricing a product too high can drive away potential customers. Pricing the product too low means not maximising business profits. Unfortunately, there’s no one-size-fits-all approach to setting the perfect price.
To set the right price for your products and services, you have to track what your competitors are charging. In addition, make sure to cover your costs and have healthy profit margins at the top.
