As any successful entrepreneur will tell you, it’s not always easy. In fact, entrepreneurship is almost never easy. Most entrepreneurs have to start out with little financial backing and sometimes even less moral and emotional support.
Owning a business requires making decisions that may make or break your business and in the case of small businesses decision making and the outcomes rest solely on the founder. No matter how experienced you are in business, you are bound to make mistakes at some point and the key to your success is to quickly identify your mistakes, learn from them, and prevent the same mistakes from happening again.
Today we consider five (5) common business mistakes made by Entrepreneurs in the course of starting and managing their small businesses.
#1 Failure To Identify Competition
What else could the consumer do instead of using your product or service? Even if you have the latest, greatest, never-been-done-before approach to something, don’t assume that you have no competition. Competition is more than just the direct, obvious competitors. Competition is also all the available alternatives. A good example is someone manufacturing fruit juice, your direct competition may be other juice manufacturers however the person selling pure water can also be categorized as an indirect competitor because it seeks to satisfy the need for a drink. The customer almost has the option of walking away. That alone is a serious competitive threat.
#2 Relying On Price As A Competitive Advantage
The prices you set for your goods or services influence nearly every aspect of your business, including things like your cash flow, profit margins, business expenses etc so choosing them wisely is critical.
Cheaper prices doesn’t always mean more customers. Most customers are willing to buy more expensive items because of the greater quality or the added convenience. Don’t forget that your competitors can also decide to lower prices to attract your customers and this might lead to a price war which would impact profits.
#3 Lack Of Marketing Strategy
Failure to market your product or service is like winking in the dark, you know you are winking but no one else knows you are winking. Marketing is one of those areas that many business owners know they should be getting involved in, however don’t really know where to start.
In this age when there are various marketing platforms and consumers are exposed to different products and services daily it has become more important for business owners to choose the right marketing strategy and make resources available for implementation.
#4 Failing To Delegate
For most small businesses, resources are usually tight and in a bid to manage resources the founder wears many hats e.g. he’s the accountant, marketer, operations managers etc at the same time. Whilst this is understandable however there is a limit to what you can handle alone.
Just like any other person, an entrepreneur has one or two natural talents. As an entrepreneur, it is your job to identify those talents and focus on them to your fullest. Surround yourself with people who are strong where your talents are weakest. Great companies are built on the foundation of exploiting a few strengths, not on trying to be masters of everything.
#5 Mixing Your Personal Funds With Business Funds.
It’s incredibly easy to fall into the trap of thinking that it’s your business, so therefore the business accounts are your accounts. Business and personal finances should always be kept separate. No matter how small your start-up, open a dedicated business account and ensure you only use your business bank card for business purposes and vice versa. The odd mistake can be forgiven, but seriously mixed up finances will cause all manner of difficulties.
Mistakes are inevitable in business, and you can’t avoid making them. They’re a necessity if you want to keep growing. So, rather than overanalyzing what you did wrong, focus on how you can do it better in the future. That’s the only way to grow.