Entrepreneurship is more in vogue now than it has ever been before, with hundreds of thousands of people deciding that life as an employee is not for them and choosing to start their own companies. While the wave of entrepreneurship is undoubtedly beneficial, it does somewhat gloss over the fact that starting, and maintaining, a successful business is incredibly difficult.
One of the ways that entrepreneurship can be particularly problematic is that there is no set guide to what works. Some businesses break all the established rules and thrive; others do everything as any business advisor would tell them to, but ultimately struggle. This can make it confusing to know what you should do - but often it’s just as helpful, if not more so, to know what you shouldn’t do. By avoiding the classic rookie entrepreneur mistakes, you can be sure that your business efforts will have the best chance of succeeding.
1. Not budgeting effectively
Financial problems are often the most significant cause of business failure, be that through overspending or simply not controlling costs. While the management of a business’ finances is something of a learning curve, it’s nevertheless one that you have to set out to master if your business is to succeed in the future.
2. Focusing on new customers only
Any business needs a steady flow of new customers to sustain it, but the pursuit of these new customers can often lead to existing customers being overlooked. This can be hugely damaging, as customer retention is one of the most important aspects of a business. As a result, it’s advisable to practice a 50:50 split, with half of your efforts spent on retention, and half on finding new customers.
3. DIYing legal and compliance tasks
At the start of your business journey, when money is tight, it’s often tempting to attempt managing your legislative compliance or drafting a contract yourself rather than seeking external, professional assistance. This is almost always a recipe for disaster, as a lack of expert knowledge can lead to oversights that go on to cause serious problems for your company. It’s far preferable to examine your budget, and potentially even make cutbacks in other areas, to obtain the expert help that can help protect your business’ future.
In the early days of a business, the more customers or clients you have, the better - up to a point. There is a tipping point where you can be doing too well. Being overworked and in-demand sounds like a good problem to have - and in some ways, it is - but is rarely sustainable for the business, nor is it viable for you personally. If the workload is consistently high, it might be a good time to consider raising your prices or even contemplate hiring an employee in order to satisfy demand.
By avoiding the rookie entrepreneur mistakes as detailed above, you should find that your path to a successful business endeavor is smooth, uneventful, and all the more likely to help you achieve lasting success. Good luck!