Young entrepreneurs spend their time and effort in starting a business. But how many of them actually succeed ? According to the U.S. Bureau of Labor Statistics (BLS), approximately 20% of new businesses fail during the first two years of being open, 45% during the first five years, and 65% during the first 10 years. Only 25% of new businesses make it to 15 years or more.
Considering the above data, the question that is most relevant is "What not to do if you want your business to succeed ?" But before answering the question, we need to understand some basic prerequisites. There are basically 2 types of businesses, one that offers product and the other that offers service. Both have their own set of advantages and disadvantages.
Product-based business: Product is tangible, hence the quality can be presented to the client easily. This helps in convincing the client to make a purchase. Down part is that manufacturing a product requires heavy initial investment.
Service-based business: The initial investment is less in most cases. But, it takes time for customer to trust the brand if it is new. So, in order to showcase the expertise, a free trial or a discounted service is something the business can opt for.
Taking the above information into account along with our business experience, we have come up with a list of mistakes that entrepreneurs commit, leading to business downfall.
Choosing the wrong business
Most individuals who fail to have a successful business are victims to this problem. They observe others and try to follow them or copy them. This never works that way. A successful business is owned by someone who wishes to address a problem statement. If the prime focus is to sell just about anything and make money, results are always short-term. So, the ideal way to choose the business that suits your personality is to understand if the problem statement that you are targeting is something you actually want to solve.
Everyone tries to get a "perfect" plan
The most common mistake people do is to plan more and act less. In this world of agility, it is important to understand that the power of small iterations and improvements is the key to perfection. There is nothing like a perfect plan. The idea should be to plan and implement parallely and improvise both as we proceed.
People try to do it alone
Individuals who intend to start their entrepreneurship journey feel it is good to do it alone. But the fact is that no one is good in everything. A team having cross-functional skills enables quicker identification of gaps and ensure faster improvements. Hence it is very much required to have a team with individuals who compliment you.
They look for spending money to make money
A very common myth amongst new entrepreneurs. They spend a lot even before starting their earning journey. Quality products and quality service do not come by using quality equipments, but by the intent with which the business provides. Hence, in order to start your earning, its required to spend minimum and derive the best out of it..
Make wrong partners
There is a big difference between making a partner and creating a team of professionals. The latter is not involved in your strategic decisions. When it is about choosing partners, make sure it is not an impulsive decision. It is important to spend enough time with the person and understand if the relationship has a long term possibility. Only when you are fairly certain, should you go ahead with the partnership.
People stop learning
The most basic and the most common mistake that entrepreneurs do. This usually happens when they feel their idea is working and is bringing them the requisite result. This feeling of progress creates a barrier for learning in many cases. Once learning stops, so does progress. Hence, one must always remember, "Success is a result of continuous learning and not the other way round."
Entrepreneurs take heavy loans to start business
Loans have always been a true friend to any businessman. But if not handled properly, it might become your greatest nightmare. Hence our advice to budding entrepreneurs is to so thorough research on the idea and then decide to go for a finance.
These are our 7 important tips which you should not do when you plan to start your new venture.
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After reading this article, you must have understood what not to do.
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