Making mistakes is a part of life, whether you are a senior employee, new parent, or first time entrepreneur. While failures are really life’s lessons, sometimes, they can be costly and time consuming that we wished someone warned us. We searched the World Wide Web and here are some of the most common mistakes by entrepreneurs.
1. Spending too much or too little on the wrong things
Some new entrepreneurs get so excited when launching a new venture that they spend on the best of everything – fancy office, top agencies, etc. While it can be tempting, some forget that capital does run out. Unless the company is already earning big time, it’s best if new entrepreneurs spend on the essentials and outsource the rest.
This also goes the other way around. Some entrepreneurs are just too scared to spend that the lack of investment on certain things hinders the growth or development of the company. It’s all about prioritizing on what is necessary for the company.
2. Proper validation
Just because you are sure your idea is great and everyone in your family is telling you that your idea will work doesn’t mean it will. So, how do you know if your idea can become a business? Proper validation is the key. Just create the most basic version of your product (a.k.a. MVP) and then present it to the public. Not only is this more cost-efficient compared to building the entire product, you will get valuable feedback from customers that will allow you to pivot or adjust if necessary.
3. Not knowing your customers
You need to know your demographic. Who are you targeting? What are their needs? What is their lifestyle like? It’s not enough to know that there is a problem to solve. You need to learn the why, when, and how of your customers that will lead them to purchasing.
4. Fundraising > Income
Some entrepreneurs spend so much on pitching and fundraising that they forget to do what matters: building a business. Focus on getting customers to buy your product, and most importantly, continue purchasing your product. Sometimes, with a growing customer base, you wouldn’t even need to fundraise. And should you need to fundraise for whatever reason in the future, you’ll be able to show investors that your product is something that people really need and that your company is worth investing.
5. Marketing not prioritized
Sure, your idea is great. But how will people know that your idea is great? Or that it even exists? Marketing is your tool to communicate with consumers on what your company is all about and for them to understand how it may help improve their lives.
6. Forgetting to register
Imagine: you have this amazing product that a company gives a bulk order. But come transaction day, you don’t have an official receipt to give. You just lost a client. Aside from avoiding possible legal implications (hello, tax evasion), being a registered company opens doors for you. It will give you a sense of legitimacy that other companies would want to work with you, and consumers would find it easier to trust your company.
7. Poor hiring decisions
Every growing company will eventually need to hire people in order to scale. The tricky part is the hiring process. It’s not enough to hire the best, it’s important to consider skill and attitude. When it comes to skill, it’s best to hire someone whose strengths are your weaknesses. Hire someone who sees the world differently and can give fresh perspectives. However, it’s also important that work values are aligned. Should a new hire significantly clash with the company’s culture, everyone’s work morale may be affected.