So, you have decided to go out on the ledge with your business idea? You are excited and scared about the opportunities and future of your new business venture. You have read all the success stories you can find to motivate yourself, and you are ready to go.
But before you get too involved, there is another side you need to think about. What are the practices and ideas you need to avoid to keep your business from failing?
While there is no guarantee for business success, there are some thoughts and practices you can avoid helping strengthen your chances of success. Let’s look at ten mistakes that can lead to failure for any new business.
- Expecting too much in the beginning
- Not doing proper planning and/or goal setting
- Comparing yourself to others in your market
- Listening too much to naysayers
- Listening too much to yes-men
- Not paying attention to your customers/audience
- Not being willing to continue learning
- Losing focus
- Trying to take on too much too early
- Giving up too easily
While there are other things that can cause stumbling blocks for new businesses, these ten mistakes are far too easy to fall into.
(Disclaimer: This post may contain affiliate links.)
Expecting Too Much in the Beginning
One of the things you must understand about starting a business is most businesses will not make a profit in the first year. There are many reasons for this:
- The first year is the most expensive with getting everything in place to begin.
- Start-ups are working on building their customer base and this can take time and extra money in the beginning.
- You will find you need more inventory, supplies, equipment, etc. than you originally thought.
You get the idea. If you want your business to succeed, you have to plan on not making a profit that first year. If you end up making a profit, great. If not, you will have expected it.
You have to plan on things being slow to start as you get your name out there. Too often people expect to open their doors (metaphorically speaking for some) and the people will start pouring in. This is just not the case for most start-ups.
If you go into your business understanding that things may be slow in the beginning, you will be able to focus your attention on growing rather than scrambling in a bewildered haze.
No Proper Planning/Goal Setting
If all you know about your business is that you want to make money, chances are you will get nowhere. In order for your business to succeed, you have to create goals that measure that success.
This goes back to creating a business plan. Depending on what type of business you are trying to create, you may not need a full-scale business plan, but you will at least need an objective, goals to reach the objective, strategies to fulfill those goals, and measurement tools in place to determine your success (OGSM tool).
What do you want to achieve for your business? Not just making money, but what problem do you want to solve? What impact do you want to have? This is the objective.
The goals are tangible steps that get you closer to that objective. These are the ideas that will bring your company’s focus towards the objective. What are the steps you can take to make that objective a reality?
Once you figure the steps out, the next step is how to achieve those steps. What can you put in place to accomplish each step along the way?
You also need a way to measure your success in accomplishing your goals. How can you determine if you have met the goals set for the different periods/stages of your business? How can you track your accomplishments and make sure they stay in line with the original goals and objectives?
If you don’t take the time to at least set goals and measurements, you have no way of keeping yourself on track and no way of determining how your business is doing. Not setting goals makes it easier to fall into the trap of chasing each new shiny idea, and then you will never accomplish anything.
Setting goals helps you see where new ideas could align with your company’s objective, and helps you determine which ideas are not worth your time, at least right now. This leads into the next mistake.
Comparing Yourself to Others in Your Market
Don’t get me wrong, it is a good idea to know what your competition is doing. It may even be a good idea to work with others in your market. What you don’t want to do is spend a lot of time comparing yourself to these other groups.
For one, each company is at a different stage in their development. If you, as a start-up, are trying to compare your results to an established company, you will get discouraged easily.
The established companies have already gone through their start-up process. They’ve dealt with the challenges of creating a customer/audience base, they’ve dealt with the difficulties of making their first profits.
They are at a different stage than you are. They are on to the next phase of challenges, and you can’t base your success on what they are doing with their companies.
But, you also don’t want to compare yourself too much to other start-up companies in your market. Even within the same market, the goals, the customers, the places to reach potential customers can all be different.
You have to find what works for you. While you can get suggestions from what others are doing, this doesn’t guarantee that what they are doing will work for your situation.
By all means, do your research. Then implement what works best for the objectives and goals of your company.
Listening Too Much to Naysayers
There are going to be people who tell you it won’t work. This can be for many reasons:
- They are basing your abilities on your past.
- They’ve seen others fail and think everyone will.
- They failed and decided it isn’t viable.
- They’re jealous that you are doing something while they’re still toying with ideas.
- A potential competitor may want to keep their competition down.
- Some people are just plain mean.
While you want to take the advice of trusted friends and family, ultimately you have to decide what you believe will work for you. Yes, businesses have failed in the past. Yes, businesses will fail in the future. I bet if you asked most of these people though, they wouldn’t regret having given it a shot.
Some of these people may even be able to look back and see that they fell into one or more of these mistakes.
When people are telling you not to do something, ask yourself why they are giving you negative feedback.
If it falls into one of the first three reasons above, you may want to do a little evaluation to make sure you really are ready for this step. But don’t just give up because others have failed. The thing is, somewhere, someone has succeeded.
If the reason falls into the last three, then don’t worry about it.
It is easy to let negative words discourage us. You have to evaluate the motives, look back at your reasons for starting your business, and determine whether you have a sound idea. If you have something worth pursuing, then don’t let the negative drown out the positive.
If you have too many people in your life saying you can’t, or you shouldn’t, and you believe you have something worth pursuing, find some encouraging people. Network with business groups in your area, go to conferences, find your support group.
Listening Too Much to Yes Men
Just as dangerous as taking in all the negative, is taking in only positive. There must be a balance. While it’s great if you have people in your life willing to build you up, if they never have constructive criticism they probably aren’t doing you any favors.
For a somewhat silly example, if you have ever watched one of the numerous singing competitions on TV or YouTube, you have seen people who should have never gone on the show, and they will have people in the background telling them how great they are.
Why were their friends and family not honest with them? It does no one any favors to be lied to about their abilities. If someone is only telling you how great you are, chances are, they are not being honest with you.
We all have places we need to improve. We all have things we are not good at. It is important to understand what these are, especially if you want to start a business. While you want encouragement, also look for people willing to tell you where you can improve.
Not Paying Attention to Your Customers/Audience
Your customers or audience are a great place to get feedback. What do they like about your company? What do they not like? What is most important to them? What do they want out of their experience with you?
These are all important questions to ask. The great thing is, most customers are willing to share the answers with you if you will just take the time to listen.
You may have a great product, and you may know exactly how this product could help your customer’s needs. But customers aren’t just looking to take care of needs; they need a reason to want the product as well. This is where listening is so important.
If you take the time to understand what excites your customers, what makes them pay attention, what they actually want answers to, you can gain valuable feedback. This will give you information, not only on what products to offer, but how to market those products.
Find ways to let your audience interact with you. Give them surveys or polls, share stories and ask for their feedback, do contests, whatever way you can think of to get them involved. This also helps your audience feel important to you and will make them more interested in paying attention to what you offer.
Not Being Willing to Learn
No matter what you do, you will always need to learn new skills.
- Technology changes rapidly, requiring constant learning to keep up.
- Areas where you are weak can be strengthened by acquiring new skills.
- Expanding your business may mean taking on a new facet or idea.
The market is ever-changing, your customers are ever-changing, and you need to be willing to change as well. The willingness to learn is important to helping your business grow and adapt to the inevitable changes.
Take department stores for instance. As online shopping became more prevalent, those department store that were not quick enough to establish their online presence found themselves shrinking, and some inevitably had to close shop. There are numerous malls across the country that have either closed or converted into gaming areas, or something else to meet the changing market.
This is the way of the world. Things will change, and you have to be willing to change with them. If you aren’t willing to expand your knowledge, learn new skills, and change where needed, you will not be able to stay viable for long. (Yes, there are exceptions to the rule, but these are far and few between)
Learning how to work within the ever-changing market goes back to the planning stage. When you first set out to create your business, hopefully you put some goals in place to determine what success would mean for you. Hopefully you are also paying attention to the market and learning as you go.
While this is necessary, you want to make sure you don’t get so caught up in keeping up with changes that you forget your original goals.
Research and learning are useful tools, but that’s just it, they’re tools. You want to make sure the time you put into your business is actually used to reach the goals you established. Yes, goals may adjust over time, but they shouldn’t need adjustment too regularly.
It is easy to get so involved in learning and adjusting that you find yourself on a different course than you originally intended. Make sure you evaluate your goals at different stages and that you are keeping those goals in mind as you go.
This is where the Journaling for Entrepreneurs process can really help you stay focused. If you take the time keep up with your journal, and take the time to evaluate it throughout the year, you can use this tool to help you stay on track.
Trying to Take on Too Much Too Early
This goes back to losing focus in some ways, but taking on too much can also involve trying to set up all your business goals before you’re ready to implement them.
Remember, establishing a business is a learning process. While you may have a great vision for your future, you want to make sure you don’t get too far ahead of yourself. You should absolutely create your business plan with this great vision in mind, but make sure you take the goals one step at a time.
Be realistic with your plan. Pick a couple of goals to focus on at one time. Once you have success with those, move on to the next set.
If you try to take on too much at one time, you will find yourself overwhelmed, and this will get you nowhere. If you will be honest with yourself, you will know how much you can handle at each step. Don’t try to do more than you can handle.
The thing is, it is easier to add new things as you go than it is to take away if you find yourself overwhelmed. Along the same lines, don’t promise more than you can realistically offer.
Your customers will respect and trust you more if you can offer a great experience with a smaller model than they will mediocre or poor experiences with a larger model.
Giving Up Too Easily
Probably the number one reason for business failure is the tendency to give up too easily or quickly. We are an impatient species, wanting to see instant results. With a business, this is just not realistic. This is true of any business.
While you want to make sure you don’t hang on when there’s nothing to hang on to, you also want to make sure that you don’t give up before you give yourself time to succeed.
Chances are, you will not see great success within the first year. You want to see markers showing the potential for success, but you can’t expect too much here. Give yourself time to grow. Give your customers time to get to know you. Give yourself time to get through the learning curve.
There are a lot of people wanting to start businesses for themselves. There is a lot of chatter out there and a lot of competition. The thing is, if you are willing to wait it out, you will have an advantage over a good portion of the start-ups in the world.
Don’t give up before you’ve really given yourself a chance.
Have an experience with some of these mistakes you would like to share? Or, do you have something you would add? Let me know in the comments.