There are two ways to learn in life and move ahead, one, try a new venture, commit mistake and learn the skill. This might be called as self-learning or the hit-&-try method. The other way to learn is from the mistakes that others have made. This is the smart way and supposedly the better way an entrepreneur should learn to succeed in his venture.
There is no guideline available to succeed in a business or no set of Dos & Don’t to take you ahead of your competitors. The only guide or road map available for a new entrepreneur is to study the traits of a successful entrepreneur and keep in mind the mistakes of a failed entrepreneur.
Here are listed few most common mistakes an entrepreneur makes:
1. Lack of Focus/ clarity
By lack of focus, we mean that intentionally or unknowingly an entrepreneur loses focus towards the ultimate goal of making a venture successful before trying his hands on expansion or new ventures for that matter. Nowadays with so many lucrative business opportunities splurging in the markets, Entrepreneurs get easily diverted towards the high profit generating ideas ignoring the running business.
This act of diversion and lack of focus will not lead to success in any venture. An entrepreneur must give enough time to the venture to flourish. Results should not be expected out of any business in a short term. It takes at least 3 years for a venture to break-even and beyond that a stable venture is supposed to generate returns for the owners & investors.
2. Vision is missing
Do we all know what we want to achieve in life? Are we clear about whether our focus is an expansion or specialize in the same product/ service line as a growth strategy? Lack of vision is one of the most disastrous mistakes an entrepreneur does. Not knowing which road to take to achieve the goal (at times not even clear about the goal itself).
Clarity of vision gives the entrepreneur ideas to achieve it and mould himself or his channels accordingly. An entrepreneur must not only have clarity on goals or vision for himself or his business but also make the same categorically clear to the team working for him. This is very critical from the perspective of alignment of the entire enterprise towards the achievement of a single goal.
3. No business plan
Many a time starting an enterprise is seen as activity wherein the owner is the king and does not have to follow a set of rules. This is another kind of common mistake any young entrepreneur can make- Lack of a business plan. Any business to be successful must have a laid down plan. This plan gives direction to the business and helps in identifying the redundant activities & tasks. This makes both day-to-day activities and the one-time decisions more focused and reduces wastage of time.
A plan clearly articulates the source(s) of income along with the way each penny must be spent. Also, a defined plan gives a good picture about the enterprise to the investor, customers & competitors.
4. Greedy goals
Businesses are not started only to earn money. An entrepreneur who eyes a long term success does not form an enterprise with a sole aim to earn profits at early stages. In case they do, this is a strong indication that the business might get stuck in the middle or shut down before its age. This happens when the start-up is formed with the only idea to make money and thus the owner fails to do an in-depth research on the project. Such enterprises are bound to fail.
On the contrary, an entrepreneur should be more futuristic in order to take the small idea to newer heights and be open to minimal returns in the nascent stages.
5. Failure to create a USP & a brand
Today is the world of uniqueness of a product or service. To win over the customer’s confidence, the entrepreneur must create a brand for himself. A brand that is different from the competition and has something new to offer to the public. Many businesses fail because they have nothing new to offer to their customers. At this time when the consumer is so demanding & smart and the technology is so advanced, it is very difficult to attract the consumer towards a new brand.
An entrepreneur with a long-term perspective should clearly define the USP your product or service has to offer in comparison to others in the industry. They should be able to leverage on this USP to take the business to the new height by creating brand loyalty. At the same time, they should be able to create a niche for their product.
6. Not networking
Overconfidence kills!! The phrase is equally true for running a business. An entrepreneur might have all the expertise of a business line but still, in this dynamic world, one has to be updated with the surroundings at all times. And this comes easily through networking. One should not think of handling things on own and not socializing in the business circle. This will make the business obsolete and stagnant.
The entrepreneur should make all efforts to increase his networking with related business owners. This will not only help him be updated but also make him aware of all kinds of developments in the (related) industries. Many a time tea-time chit-chats lead to great ideas.
7. Limited financial planning
All businesses needs funds- this is a fact.Another common reason for businesses to fail is mismanagement of funds. The owner should be ready & willing to invest in the business at the initial stages, of course in a planned manner. That is, not only the funds are to be arranged for a business to start but also they are to be managed properly to run the business smoothly in the long run.
An entrepreneur can also hire a professional or advisor to use funds amicably.
8. Plan for contingencies
At times, one wonders “What happened suddenly? Everything was running so smooth, then why did the business shut down?” These situations arise when the owner is not ready for the contingencies or sudden breakdowns. Planning for contingencies should be a part of the overall business plan. Such plans (also known as business continuity plans) must be prepared keeping in mind the exceptional situations that may arise depending upon the type of business, industry, infrastructure and economy.
An entrepreneur who has planned for such incidents will never fail due to such exceptional or sudden emergencies.
In nut shell, an entrepreneur needs to be ready, updated, flexible & socially active to survive the tough situations