Entrepreneurs are the toast of the digital age.
The 9-5 grind is old hat, and now technological disruption, innovation and game-changing ideas, apps and business models are key. But with billions of ideas popping up around the world, there seems to be a pattern regarding what separates a successful entrepreneur from hundreds of thousands who fail.
It is rarely a lack of imagination, creativity or ideas that cause entrepreneurs to struggle, but rather a lack of preparation, poor organisation and planning, loss of focus, poor hiring, legal challenges and disputes, burnout, disharmony among team and investors and bad bookkeeping and overall financial mismanagement. With entrepreneurs starting their own businesses, many are uneducated about common business structures and where they fit within them.
It doesn’t matter how many TED Talks you’ve listened to, the underlying message is the same: Have a plan.
It is great to have a lightning-in-a-bottle idea; but the idea is not enough. You and a meticulously planned business strategy with long and short term goals is what is going to make that idea a reality.
You also need financial planning, an idea of how to keep your startup from running into the ground before it’s even in the air. So many entrepreneurs fall into the trap of thinking they can worry about financial planning AFTER the business has caught on. This is a costly mistake. Get a plan, get organised, implement a deadline and get going!
Brands matter, and you need to make sure yours is strong. Too many entrepreneurs have lost their handle in the market because they weren’t focused on their branding and marketing strategies. Building a loyal customer base, clients and an audience is essential for good business, especially now that people do much of their research and shopping online.
It is an incredibly costly mistake to not invest in marketing and branding. Why would people choose your company if a.) they don’t know you exist, b.) don’t know what you do, and/or c.) don’t feel connected to your brand in any way?
The answer is simple: they won’t.
To get good results, you need good people around you. Ask any successful person and they will tell you the same thing.
- Don’t pick the wrong partner. Often entrepreneurs go into business with friends, family, or people they haven’t vetted properly and regretted it. If it’s a legitimate business venture, you need to look at it logically and with longevity in mind.
- Don’t choose the wrong investor. It can be tempting to take the first deal from an investor with deep pockets, but disharmony among investors is frequently cited as a cause of startups failing. Make sure it’s the right fit.
- Don’t hire the wrong people. You need to be surrounded by people you trust, people who work efficiently and people who get the job done, not people who over-promise and under-deliver.
Hiring is a financial decision, so don’t hire too quickly. That decision needs to be made with growth in mind. Don’t jump the gun after one spike in profits, but rather wait for a steady, sustained profit increase, accompanied by a sharp, almost unmanageable increase in workload. These are dead giveaways that it is time for help.
We glorify the dedicated genius and the constantly-working entrepreneur- but we really shouldn’t. Productivity and brain activity are hampered by multitasking, fatigue and overuse. Hard work, perseverance and dedication are admirable attributes, and ones you will need to become successful, but doing everything yourself is the quickest way to burnout and mental and physical fatigue.
You don’t have to have an encyclopedic knowledge of law to be a business owner, but you do have to have working knowledge. Three of the most common legal mistakes entrepreneurs make are:
- Not registering your business.
- Not picking the right business entity.
- Not protecting your intellectual property.
This kind of stuff will come back to bite you. There are so many legal mistakes entrepreneurs can make in terms of laws, compliance and regulations so seeking legal advice and counsel is vital.
The best way to fix your product is from feedback. So, listen, and adapt. Stubbornly sticking to your original idea with no room for growth, change or adoption is a shortcut to failure. You may be an expert in your field, or you may not be, but either way, understanding your market, your audience, and how they,and their needs are changing is imperative to YOUR business.
Entrepreneurship is not an inherently safe career path. That may be the very reason it draws in the creative, energetic, risk-taking types. But whether you make these mistakes or not, challenges will always rear their ugly heads, and the best policy is to approach these challenges with grit, determination and most importantly, positivity.