According to a study conducted by U.S. Bank, 82% of businesses that don’t work out fail because of cash flow problems.
Starting anything from scratch is never easy, and businesses are a lot harder than most other things to get right. As an entrepreneur, you won’t be able to avoid all common entrepreneur mistakes. It’s just a fact of life. But making a mistake isn’t the end of the world, that’s how good entrepreneurs learn and grow into eventual successes.
However, once you get started, you really can’t afford to go on making blunders indefinitely. You’ve got to work smart, as well as hard, and that means avoiding entrepreneur mistakes when you can.
The following are five entrepreneur tips for avoiding common entrepreneur mistakes.
1. Choosing the Wrong Cofounder
If you’re starting a business on a small scale, you don’t technically need a cofounder. However, it is worth noting that of all businesses worth over a billion dollars, a mere fraction started with only one founder. So having the right cofounder can dramatically increase your odds of major success.
On the other hand, having the wrong cofounder can have the exact opposite effect. First and foremost, a cofounder should be mentally and emotionally compatible with you. What are your key skills? What will you be contributing to the partnership? Now, what are your weaknesses? Who can you hire or partner with who can fill in your blind spots and balance out your strengths?
2. Being a Know-it-All
This is one of the most important tips for entrepreneurs trying to avoid common entrepreneur mistakes. You should never be a know-it-all when it comes to business. Why is that? Quite simply, it will be detrimental to your success.
You can never “know it all” when it comes to business, even if you’re the best in your field. Someone will always be there to outdistance you if you don’t stay on your guard, and there’s always someone who understands something better than you do. By assuming you have all the answers already, not only do you make your business susceptible to being taken over by newer, more free-thinking competitors, but you alienate yourself from those who could be teaching you how to stay ahead.
It’s the first rule of success: be teachable. Because if you aren’t teachable, you’ll never succeed. Even if you somehow do, it won’t last long.
3. Expecting Customers to Find You
Some budding entrepreneurs have a “build it and they will come” mentality. They think that just because they’ve started a business, whether it’s a brick-and-mortar store or a website, people are bound to check it out.
However, you’re setting yourself up for failure if you start your business this way. There are a lot of businesses out there and a lot of new ones being started every day. What are the chances that masses of potential customers are going to notice when yours open its doors?
In truth, the chances are slim. Unless you’ve made sure your target audience knows about your business and why they should care, you won’t see much traffic right away.
Marketing isn’t the most popular skill in the world, but you’ve got to be good at it to be an entrepreneur.
4. Getting Too Obsessed Over Competitors
Being successful as an entrepreneur is about more than worrying about your competition. While you should be mindful of your competitors and what they’re doing, you want to be focused on the unique value you’re contributing to the world, regardless of what other businesses are doing. It’s better to prioritize what makes you different than to constantly try to beat the competition.
5. Hiring the Wrong Employees
Too often business owners hire people not based on actual capability, but on whether they like them or not. And while you should definitely try to hire people you’ll get along with, that should never be your only reason for hiring someone.
Your company’s success depends on the competence of your employees. Would it make sense for your business to only hire your relatives and friends? Or are you just trying to secure or maintain their favor? Would that applicant you’re considering actually do the job well, or are you only considering him because you feel like he’s a nice guy and deserves it?
And there you have it — five of the most common entrepreneur mistakes to avoid.