When they do things right, entrepreneurs can change the world. Building a fantastic blog that generates thousands of visitors per week and creating backlinks that drive the site to the top of Google’s rankings are examples of how this can happen.
But most of them also commit many mistakes. Take a look at the list of five classic errors below and decide whether you could be committing any of them. (But don’t worry: You have plenty of time to correct your course!)
Dismissing Market Risk
One of the biggest ways in which companies fail is when they downplay or dismiss market risk. Many entrepreneurs spend too much time and money designing the perfect tech platform, but not enough on whether the platform provides actual business value.
To put this another way, many new firms burn through most of their cash with a piece of technology that needs a solution. But if you’re wrong about the market, this could put you out of business.
A better approach for the wise entrepreneur is to allot several months to talk to potential customers in order to understand what they need and want. Then you can try to provide it to them.
Acting Like You Know It All
Pretending you have all the answers is rarely the behavior of a successful entrepreneur. Instead, everyone at the top of your firm should try to remain humble, and open to learning and experiencing things that can drive the company forward.
When you’re a brand-new entrepreneur, there’s nothing wrong with not having all the answers. But if you need help to get your company going, go ahead and ask others for it.
There’s probably someone in your network who can give you the help and answers you need. All you need to do is ensure that the person has the skill and knowledge to provide advice in the areas where you need help.
Not Vetting Your Co-Founders
Many entrepreneurs require financial assistance to get the company off the ground, so they accept co-founders. But you need to ensure that your co-founders have the necessary skill and knowledge to fu;fill their roles, or the operation will fail.
You should assess each co-founder as fully as you would your marketing director or HR representative. (You did, didn’t you?)
Ignoring Vital Feedback
When you are launching your company, you should seek ongoing feedback from clients, customers, vendors, and employees. If you pick up any warning signs about problems with a product, you’d be crazy to ignore it.
Of course, most issues that turn up early in your company’s existence should be readily correctable, but you have to be willing to listen.
Lacking a Financial Cushion
When you start your company, you’ll have to provide nearly all its resources and effort nearly all the time. During this period, you need to have sufficient financing to cover the overhead expenses for a few months or even a year or more, or other earnings from a second source of income.
When you consider a new project, it can be smart to combine it with your more profitable activities for a while. Over time, you would hope to generate profits with both.
For example, if you monetize your blog, you may not see much revenue for months. But you might be able to realize income by writing for other blogs and using that money to cover your overhead expenses and furnish the resources to get your blog to progress to the point of income generation.
Many entrepreneurs fail when they launch a new venture, but if you are clever and avoid some of the common pitfalls, you may be one of the ones who becomes a success. And if the first venture fails, it’s ok!
Honestly, not a few entrepreneurs have experienced several failures before they hit on the one that brought success.