According to the Harvard Business Review, 75% of all start-ups fail in the United States. Less than 50% of these businesses celebrate their fifth anniversary, and 33% of those that survive in the business world make it to their tenth anniversary. As the above stats indicate, the corporate world is cold, harsh, and competitive. You need to be very strong-willed to make your dreams a reality. However, looking on the bright side, there are numerous facilities and opportunities available to businesses now that were not even a speck of vision a few years ago!
Entrepreneurs make some mistakes when they lay the foundation of their start-ups that make the road to success a very difficult hike. Most of them can be generalized over the 75% that fail in the US. Hence, mitigating them becomes easier after thorough analysis. Here are a few common mistakes that many businesses make:
Lacking Passion, Patience, and Focus:
Have you ever wondered why so many businesses fail every year? Often, businesses fail because management lacks the enthusiasm to see things through, the patience to wait for things to happen, and the focus to make the firms stand out in a crowded market. It harms the business itself and the networking and relationships with the stakeholders. Businesses that aren’t zealous are bound to fail sooner rather than later. So, gear up and give your business the time that it needs to thrive!
Did you know that the biggest motivator and cause for starting up most businesses is financial freedom? A large proportion of entrepreneurs have the misconception that a start-up gives you the kind of luxurious life that fifty years’ worth of job can never live up to. While this might be true, in most cases, this can’t happen until you have a sound financial management team or tools in place.
Hiring accounting personnel can be very expensive and can easily put a dent in your revenue. Hence, it is advised that each business owner must be adept in financial analysis. For this purpose, it is advised that they go for finance in MBA degree when selecting their field of specialization. That can help you better understand the financial position of your business and make strategies to capitalize on your strengths.
Negligence in Business Plan Development:
A large number of SMEs start without an entire business plan, and if you don’t plan how you’ll run your firm, you’re setting yourself up for failure. That is a recipe for failure and a fatal flaw. A business plan acts as a safety net in more ways than you can count and helps you lay a foundation for your business and build and grow your business. A strong business plan may assist you in identifying product and market development prospects and present and potential revenue and diversification sources.
Incompetence in HR Management:
Human resource is the key constituent of any organization. A business can persistently face adversity if its key personnel are competent. Many businesses hire human resources to decrease the burden of work on their executives. While this is a good initiative, it needs to be done on merit and competence rather than just division of labor. The success of a project lies in the hands of the people working on it. Hiring the wrong people is the biggest blunder any business can make. They can take away credibility, tenacity, skillfulness, and so much more from your business than just potential profits.
Misidentification Of Customers:
Many businesses fail because they misidentify their target audience and hence cannot cater to their needs and wants. They are tight because they cannot win a significant market share despite planning rigorous and very innovative campaigns. Moreover, businesses tend to add all types of products to their portfolio and hence want to cater to everyone. There can’t be a bigger mistake that you can make. Avoid the trap of thinking that you can be the Jack of all trades!
Hence, it is important to understand the customers you are catering to. For this purpose, you can take feedback from them through surveys, focus groups, and one-on-one interviews.
While most entrepreneurs and businesses realize the importance of marketing, some businesses still don’t give it the credit that it deserves. In this era of Big Data and hyper-competition, marketing often sets you apart. Create a marketing plan about attracting your target audience to your product. Formulate a detailed marketing strategy especially highlighting your product’s value addition.
Setting Unattainable Goals:
You must set realistic and attainable goals for your business. Sometimes, businesses become so absorbed with their idea that they forget to set boundaries. To set attainable goals, set specific short-term and long-term goals. Set a goal and divide it into attainable objectives so you can take one step at a time.
The “I Can Do It All” Attitude:
One common mistake among entrepreneurs is thinking they can do everything themselves and don’t need to hire anyone. While confidence is an admirable characteristic, this attitude is a barrier to success. If you have this attitude, you need to understand that there is a world of difference between formulating an idea and successfully implementing it. And implementation often takes time, money, and expert opinion. You must network with people who are part of the industry you are running a business or plan to in the future; their advice is the greatest guidance. Moreover, you will just be compromising on quality if you overburden yourself.
It is easy to prey on one or more of the aforementioned mistakes. However, it isn’t too late to take a step back, put things in perspective and bring about change! All of the above mistakes are redeemable if you are willing to adopt a growth mindset and positive attitude.