Entrepreneurship is not for the faint of heart. It takes a lot of grit, dedication, and determination to be successful. However, even the most driven entrepreneurs can make mistakes that sabotage their success. Below are 10 common mistakes entrepreneurs make that can hinder their success.
These are also what every new entrepreneur should know before starting their small business. When I started out, I wish I had such a list that I could use to look out for potential pitfalls. I am compiling them for your benefit, so hopefully you are aware of them and you can avoid them and make less costly mistakes.
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1. Letting Fear and Lack of Information Prevent You from Taking Action
As a new entrepreneur, it's only natural to feel some fear. In fact, it is likely something you won't ever be able to shake as a business will always be inconsistent.
Waiting to take action until you believe you have all the information will keep you behind your competition. You can't possibly expect yourself to know all the answers or be perfect. But, the more you take action, the more you will learn and perfect your skills.
2. Starting without realizing how entrepreneurs think
Entrepreneurship is a mindset. You must start with an entrepreneurial mindset of wanting to succeed and not wanting to fail. If you are going to try something new, you must be willing to fail and learn from your mistakes.
If you have never been an entrepreneur, develop a mindset that it is okay to fail as long as you learn from your mistakes.
You can read more about the difference between the employee versus entrepreneur mindset and also how to transition from employee to entrepreneur most successfully from my two earlier articles.
3. Over Planning or Suffering from Analysis Paralysis
Information overload and over-planning can blind you to the results you need to be a successful entrepreneur. A commonly seen problem for entrepreneurs is overthinking and not taking actions. If you take too long to be ready, you may miss the opportunity completely.
You can't expect yourself to know everything. Which means you will never have the perfect plan. Therefore, it's better to use the “ready fire aim” philosophy, which means to take action and go for it when you are ready and then adjust as things change and make continual progress. If you're always rethinking your business plans, you're only stopping yourself from taking action.
4. Taking On All the Work Yourself
This is an easy mistake, as many new entrepreneurs try to save funds. However, there's no way you can be a successful business owner, accountant, marketing consultant, content creator, and virtual assistant without eventually burning out.
Often hiring just one person to help you get started or do the tedious work can save you more time and add more money to your pocket.
5. Failing to get the basics right
If you don't get the basics right, you'll never succeed. This is true in almost every area of life, whether it's learning to read or becoming a master chef. If you don't have a firm foundation, you'll never be able to build something great.
This is especially true for your online business. If you don't have a solid understanding of the basics, you'll never be able to advance to the next level.
Have a Poor Understanding of Your Target Audience
If you don't understand your target audience, you won't create value. Value is essential to building successful businesses. It's simple: without some kind of value, you won't acquire revenue.
Do not skip doing the research. Makes sure you research your audience and understand them. This includes asking for direct feedback any time you can.
Trying to be everything to everyone
One of the most common mistakes entrepreneurs make is trying to be everything to everyone. When you first start a small business, it’s important to narrow your focus and niche down your target market.
Trying to be everything to everyone is not only impossible, but it’s also not an effective marketing strategy. You need to know who your ideal customer is and what their specific needs are so you can tailor your products or services to meet those needs.
A Lack of Business Goals, and Objectives
If you skip a business plan, you might skip your goal of being an entrepreneur. Business plans help you come up with a viable business.
Each section of a business plan helps ensure you know what it takes to make your business profitable.
Ignoring Finances and Proper Marketing
One of the main reasons businesses fail is because of poor finances and cash flow. We can easily solve this through proper research and creating a realistic business plan. A business plan should be financial projections and the start-up costs or fees required to get it going.
Having a clear understanding of this helps ensure you know what it takes to be successful and what kind of marketing plan you need to reach your goals. Without marketing, you can't expect your target audience to find you or know your business exists.
6. Being overly optimistic
Entrepreneurship is certainly not all beds of roses. You need to realize that there are upside and there are downside being an entrepreneur. While the upside is all the freedom and rich reward that may come with this endeavor, you need to put in the hard work.
People underestimate what it takes to be an entrepreneur. It is not easy; it requires a lot of effort and patience. Some people have unrealistic goals and hope to get rich quick. This is especially when many of the trainings and courses usually portray the successful side of the entrepreneurship and not the hard work required.
Another reality is that starting up a new business can be expensive, so you need to be aware of the true costs involved. Costs that you need to consider when starting a business include the cost of hiring employees, the cost of marketing and advertising, and the cost of obtaining any necessary licenses or permits.
7. Not Getting The Priorities Right
One of the most common traps entrepreneurs falls into is not getting their priorities straight. It's easy to get caught up in the day-to-day grind and forget what's really important in life.
Thus, many new entrepreneurs do not know they need to focus their time on revenue-generating activities. They ended up spending their time doing the $5 tasks (e.g. spending an enormous amount of time just to set up their websites) and left with not much time to do the important things, such as validating their ideas. This underlines the importance of time management.
What they should have done instead is to outsource to someone else who may do it for them or simply choose to start on a platform such as Shopify which is easier and more intuitive to set up with so they can focus on their business.
Another overlooked priority is the need to invest in learning. Many entrepreneurs focus on doing so much but they ignore the learning. You need to first learn to be aware of your strengths and make the most of your own skills and then delegate the rest to others, as I mentioned earlier.
8. Not Staying Focused
This is also called the Shiny Object Syndrome, and many entrepreneurs suffer from it. The shiny object syndrome is a condition where people become easily distracted by new and shiny objects.
As a new entrepreneur to the online business world, it's easy to get caught up in the excitement and attracted by another new business opportunity, new course or new tool.
However, this can lead to you to keep chasing after the latest trends or fads instead of focusing on what is important or what they are supposed to be doing. The syndrome can be detrimental to your productivity and success.
You need to focus on one thing and make it successful first before you embark on the next one. Otherwise you may end up with trying out several ideas, but none of them successful.
9. Not Putting Health First
Not putting health first is the biggest mistake one can make and it can lead to several problems down the road. Since running online businesses could mean leading a relatively sedentary lifestyle and sitting in front of the computer all day long. You need to consciously include exercises or physical activities into your daily task schedule.
Otherwise, you may suffer in the long run. What's the point of making a lot of money but lose your health in the end? You cannot enjoy the fruit of your labor. Thus, it's important that you put your health first. You need to make sure you are eating healthily and taking good care of yourself first.
10. Not Diversifying Their Income Streams
This can be dangerous, as it leaves them vulnerable to many unforeseen circumstances. One example I saw and experienced is when people who started their business on Amazon.com (or any other online marketplace) and failed to branch out and develop their sales channels.
They depend on selling on Amazon for their entire business. However, when Amazon suddenly closed their seller account because of some unforeseen reasons, they lose their entire business. So it is important to diversify their sales channels and not relying just on one source.
As an entrepreneur, you are free to pursue whatever business you want. Unlike employees who sell their time for money, you can diversify your income source and pursue different business ideas once you have success in one of them.
Conclusion to 10 Common Mistakes Entrepreneurs Make And How to Avoid Them
So there you have it: 10 common mistakes entrepreneurs make and how you can avoid them. I’m sure there are many more, but this is a great start. Be sure to avoid these mistakes if you want to be more successful in the entrepreneurial world. Avoiding these mistakes can save you time, important resources, and overall success.