Many start-ups fail every year, but there are often some common issues leading to the failure. Entrepreneurs fall into the same trap over and over again, but if they could avoid these common mistakes, they would be rewarded with a significant increase in the chances of their business being successful. It helps to know something about some of these mistakes so that you can prepare yourself to avoid them and provide yourself with the platform for a successful business.
Trying to do everything yourself
It is quite common to see entrepreneurs handle everything by themselves from marketing onwards in the mistaken belief that they are good at everything and that it would be a mistake to spend money on expertise where it is required. It should be quite clear that, with due respect, you cannot possibly be good at everything and it is important to acknowledge that they should handle aspects of the business which needs to be done by experts. It can often be false economy to try and save money by cutting corners. For instance, structuring potential investment is an expert job, and mistakes can come back to haunt you down the road. A free online guide is unlikely to serve your purpose.
Meaningful data and wishful thinking
Wishful thinking can often kill any business dead, and you need to do plenty of homework including number crunching and figures. All the best big ideas are completely worthless unless they have been validated with meaningful data or at least with some indication that there is a chance of success. Once the data has been collected, it can be used and manipulated to create milestones and key performance indicators so that you can keep track of how your business is progressing. Often, you will find that you may get discouraging initial feedback, but if you persist with the collection and analysis of meaningful data, your initial thoughts could well turn out to be complete winners.
Skimping on business planning
Many entrepreneurs often forget that the purpose of a business plan is to create a roadmap or a set of guidelines to guide the future of the company with the result that they tend to skimp on the business planning process and often ignore it completely. As a result, they tend to overspend on the wrong things when they have plenty of funding, and by the time they realize that this is the case, it is often too late to do anything about it.
A business plan helps you to set realistic and practical budgets for the various aspects of the business and how you can get the maximum value for the money that you spend. Because you are prepared in advance for anything that could go wrong, you will also be able to draw up contingency plans to take care of any eventuality. You can also figure out right at the beginning that you are chasing the wrong ideas and get a chance to abandon these plans before you spend too much time and money. Finally, a proper and thorough business plan will enable you to raise investments from sources of funding such as venture capitalists well before the funding will be required because these people will get a clear idea of exactly what you have in mind. You can also make use of high-risk merchant accounts.
Failure to delegate
It is probably the most common failing in management arising from the reluctance to give up control and trust other people, and this results in trying to do everything yourself and failing in the attempt. The instinct is naturally understandable but often results in entrepreneurs worrying about the final details well they should be concentrating on the broader strategic aspects. The best way to approach the process of delegation is by drawing up processes representing a guide for how you think things should be done. This will provide you with a great deal of peace of mind and provide your employees with the direction and guidance that they require. Not incidentally, this will also enable you to get the best out of your employees.
Thinking that money is the solution to every problem
Many entrepreneurs believe that money means that their problems will automatically be resolved. However, they forget that money does not think for itself and means redirecting financial resources for the best possible use, especially, in the resolution of fundamental issues connected with the business model. If there is a flaw in the basic business model, throwing money at the problem is not going to work unless you fix the problem before raising more money. Problem-solving requires the use of all the possible available resources which includes money but much else.