Entrepreneurship can be thrilling and very fulfilling especially when everything is sailing along well.
But it takes just one miscalculation or wrong step to bring everything crashing down.
A bad firing decision, a delay in responding to a customer complain, dabbling in price wars, an ill-advised loan..….business owners are usually one mistake away from an absorbing crisis.
The good news is that entrepreneurs don’t have to wait to learn from own bad experiences and can instead use errors committed by others to maneuver the sometimes challenging entrepreneurial waters.
Here are some mistakes that you need to avoid to succeed in your entrepreneurial journey;
1. Overexpansion
Remember Uchumi’s collapse? Experts believe that the root cause of the supermarket’s troubles was the unplanned expansion it undertook a couple of years ago.
Overexpansion happens when an entrepreneur equates business success with how fast the business can open branches and is a sure business killer.
Managers and owners invite bankruptcy by randomly opening shops and committing more of the often borrowed capital on locations that may fail to pay back.
And it’s a problem world over.
For instance, it has been reported that many of the businesses making it into the revered Inc magazine‘s “fastest expanding companies” list each year collapse or are disposed of less than 5 years later.
That’s because hyper-growth generates cash flows problems amongst other challenges.
Instead, entrepreneurs should focus on their strategy and go for controlled growth.
2. Failure to Change
You may have heard about the problems facing Posta- the one time giant parastatal.
Actually the writing is on the wall and sooner than later, posta (on its current model) will be history.
After all, when last did you send a letter? – Posta’s main business?
Change is the sole constant and this is truest in businesses. Fail to adapt to business circumstances and prepare to go the dinosaur way!
You may also have heard about Nokia (the World’s Number one mobile phone maker for a couple of years).
It stagnated and eventually died off after ignoring the signs of time and shift to making smartphones when the first smart device appeared on the scene.
As such, it’s a sure suicide if you- the entrepreneur is sleeping on your job and failing to move with changing times.
3. Chasing the ‘Shiny’ Objects
Some entrepreneurs lose focus and are quickly attracted to ‘attractive’ new ideas and stop being themselves.
They say they want to make a kill before others discover the so-called new opportunity.
Despite having an excellent business plan and being laser focused for years, you suddenly feel obligated to pursue the ‘trending’ business although you neither have the knowledge nor the skills required in the concerned industry.
That’s why people closed shops to start the now infamous quail business.
Oftentimes, these ‘shiny’ businesses ends in failure because they take away your attention from the core business.
Rather than going for such ‘businesses’ and regret later, entrepreneurs should keep the eyes on the ball and concentrate their efforts on the venture that has been paying their bills.
4. Failing to Manage the Cash
According to various research studies, Cash is another notorious killer of enterprises.
Needless to say, your shop will need cash to manage the daily operations. But some entrepreneurs forget this and embark on a spending spree especially during the peak season.
They then find themselves with a huge pile of unpaid bills including rent, salaries, utilities not to mention deficits in stock during the low sales.
This can be catastrophic and causes eventual failure if the cash problems are not addressed.
To escape from such troubles, Entrepreneurs should not misuse the cash and should cut off unbudgeted spending at all times.
5. Too Much Multi-Tasking
Some business owners want to do everything in the business and overlook their staff.
But this is not practical or healthy for your future prospects and could stagnate the businesses.
Some urgent tasks are delayed since you don’t have time leading to lost business. Other times, you’ll give substandard services due to fatigue.
Also, cases of business owners who collapsed under the burden of overworking are very common.
Still, since you are over-committed in daily mundane tasks, you will fail to strategize or to instigate growth through calculated actions meaning your competitors may leave you behind.
The solution to this is in delegating! Allocate the simplistic activities to trusted employees and concentrate on strategic chores that will bring future growth.
And always take a break. It’s very healthy even for your business.
6. Being Unrealistic
Decisions should be pegged on the actual happenings.
But new entrepreneurs can get so engrossed trying to make their “innovative proposal” to work and often end up making wrong choices due to unrealistic assumptions.
Base your future plans on accurate information and don’t dream too big prematurely.
And while at it, remember that rivals, pressure from clients, staff demands, and copycats can mess up the best-laid plans by making unrealistic suggestions.
To achieve, entrepreneurs should remain sober and set well-informed goals. Also observe the environment for threats so as to counter them as soon as they emerge.
7. Living Under Fear
Fear stops even the most ambitious person from taking action. You may be seeing a virgin fat market, a powerful opening, or a great employee, but you don’t respond.
The self-inflicted mental hole is a handicap and can drastically your chances of hitting the jackpot.
Tony Robbins, an American author and entrepreneur suggests that people work hard to escape suffering than they will do to gain pleasure.
The worry that fortunes could change for the worse and bring pain if you take action dominates and hinders talented entrepreneurs from maximizing their potential.
In any case, most people would rather stay in the famous comfort zone than risk and fail.
But we all know that in entrepreneurship, success comes to those who are ready to risk so tackle your fears and follow the uncharted waters- success could be nigh!
Summary
A slight error can leave be devastating for entrepreneurs and could lead to huge losses and business death.
Thus, to realize a return, you should avoid setting unrealistic goals and stop chasing ‘shiny’ objects.
Similarly, be bold and take action if you feel that the prospects are good.
Also learn to save your business cash for a rainy day, delegate, and be ready to adapt to change as clients and industry change.
That way, you and your business will become another success story !
True