Only a bold, brave person chooses to become an entrepreneur. If you want to succeed in business, you’ll need to learn not only from the successes of others but also the mistakes, and the latter are often more instructive. Following are four common mistakes first-time entrepreneurs make.
Are you someone who struggles to decide what to have for dinner each night? If so, running a business likely isn’t for you. One of the crucial elements of entrepreneurship is the ability to make fast but informed decisions. Many people fear this kind of choice. Being wrong forces people into a stalemate called analysis paralysis — one of the most fatal errors for people in leadership positions.
If you’re unwilling to commit to one side of an argument, this confusion will filter down to your employees. They, too, will act indecisively. The inevitable outcome is that your business will suffer due to a lack of direction. People need leadership, and that will require you, the entrepreneur, to make hard choices.
During the early days of your business, you must avail yourself of every potential business relationship. You might have heard that 90 percent of startups fail. One of the reasons is that companies fall victim to the burn rate of their cash flow. With a lack of ready clients, such failed enterprises spend all their money without any viable way of generating more.
How does an entrepreneur get more clients? They network. Through personal and professional connections, you can meet even more people, many of whom are potential customers, and you can begin to foster relationships with them. All of this seems rudimentary, yet a shocking number of new business owners fail to explore these avenues. The fear of rejection causes some people not to try. You must demonstrate more boldness than they exhibit and embrace the networking process.
Money Matters More
Unquestionably, the most difficult aspect of first-time entrepreneurship is learning how to handle cash flow. As noted above, you have a finite supply of money. You have to be careful to make it last long enough for you to earn more. Many startups struggle due to their lack of on-site accounting professionals. New business owners aren’t often skilled at bookkeeping, so they miscalculate their financial situations.
Fortunately, cloud accounting software can address these concerns. For example, Sage’s small business billing software makes transactions easy enough that you can know at a glance the status of your corporate bank account and other financial data. Such financial apps empower you with the ability to take complete control of your balance sheet, knowing precisely what your short- and long-term cash flow is. In short, products like Sage will make you a better entrepreneur.
Don’t Get Attached
Did you know that Pinterest was once a business app? It was a shopping program called Tote, and nobody cared. Then, founder Ben Silbermann accepted that the pinned board concept surpassed the original expectations for Tote as an app, so he pivoted.
Similarly, Android, now the dominating smartphone operating system, started with simpler goals. As originally intended, it was a cloud storage camera system complete with a revolutionary operating system. The catch was that its programmers built it to connect to computers, running much of its programming through them. Google recognized a better usage of the technology and purchased the company. The rest is smart device history.
What’s the point? Your original ideas for your company shouldn’t be finite. There’s an ebb and flow in business that is impossible to anticipate in advance. Plan your early strategies for the revenue you know your products can earn. As more opportunities become available, don’t ignore them in favor of your current revenue stream. Instead, explore their potential, keeping in mind that some of the most popular companies on the planet started out as entirely different enterprises.
When starting a new business, realize that plenty of cautionary tales exist. You should not be afraid of these mistakes but rather appreciate their value. Learn from the miscalculations above, and you’ll better position your business to succeed.