Setting up an enterprise is not an easy task. Similarly, running and managing an enterprise is not as easy as portrayed. Your company will demand a lot of time, capital, and energy in the initial phases. In addition, you will find yourself playing different roles because, at the time, you lack the workforce and the capacity to hire human resources.
Recent studies reveal that more than 50% of start-up enterprises barely make it past the five-year mark. Only less than a third make it past the ten-year mark. Here is a listicle of the common mistakes that business owners make when building an enterprise.
Finance is the number killer of most start-up companies. It is a two-edged sword. Either you invested too much, took up many loans that you could not pay, or started with too little to give the business a better footing in the industry. Either way, finances are a slippery slope that one needs to learn and explore independently.
On the other hand, the issue may not be the start-up capital but your expenditure habits. Unfortunately, most entrepreneurs see it; either you spend too much money or do not spend enough money.
The latter is explained in a scenario where hiring is based on cost. Most new entrepreneurs do not know that cheap staffing comes at a cost long-term. In most cases, the cheap labor is either inexperienced, unreliable, or not adequately skilled for the task you are hiring them to do.
It would be prudent to get a small team of qualified, reliable, and skilled employees to propel the business goals to actualization.
2. Poor Planning
Planning is essential in any business setup. Planning is not only about financial planning. It should trickle down to planning the monthly, weekly, and daily activities. Sometimes as an entrepreneur, it isn’t easy to keep tabs on everything in your company. An entrepreneur resource planning (ERP) system is ideal for such a scenario.
Consider outsourcing an ERP consulting service if you start feeling overwhelmed. It will help take the load of the nitty-gritty of the business so that you can focus on the bigger picture.
3. Setting Unrealistic Goals and Expectations
Most entrepreneurs are visionary. However, the common mistake is making unrealistic expectations for your company. It would be commendable if you started small and grew from the bottom up. But, unfortunately, you cannot venture into business with the mindset that all things will be merry. Some months you will be operating at the operational cost, and in others, you will make losses.
True power and wisdom lie in the heterogeneity of counsel. Therefore, it is excellent to surround yourself with other like-minded individuals as an entrepreneur. Share ideas and concerns, find solutions to problems you face, and be open to learning. The latter will help minimize the number of entrepreneurial mistakes you are likely to make.
The running of a business may take a toll on your character. The sooner you realize your mistake and set realistic goals, the faster your company will be on track with its growth.
4. Circumventing Marketing
The mentality of most entrepreneurs is that in the first couple of weeks or months, it is not necessary to market yourself or your brand. You assume that clients will visit your enterprise in search of what is new in the industry since you are new. However, marketing your business is an indispensable tool in building your enterprise.
Additionally, most business owners think that marketing is capital intensive. However, with recent revolutions in the marketing industry, all you need to do is set up an impeccable website. In addition, you may decide to open business accounts on social platforms. Thus, marketing not only opens your company to new clientele but also ensures that you maintain old clients.
5. Costing Your Product
Healthy profit margins are crucial in the running of any company. As a new entrepreneur, you may be tempted to set lower prices as a strategy to attract customers. However, these clients will not be too excited when you decide to increase the costs for your product. Therefore, conduct your research and correctly price your item from the word go.
A business empire was never built in one day. It takes time, energy, and capital. However, by applying the above tips, you will be able to weather the troubles of entrepreneurship.