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Avoidable Business Mistakes Most First-Time Entrepreneurs Make
Like anyone else, entrepreneurs are prone to making mistakes. Some of them are no big deal. They correct the error and move on. Other times, however, the mistake can lead to the end of the enterprise and all the dreams that go with it.
Strangely, a lot of these mistakes are actually entirely avoidable. They’re not just a function of the inherent randomness of the universe. Instead, they’re baked into the decisions that they make from the start.
In this post, we take a look at some of the most avoidable business mistakes new entrepreneurs make so you don’t follow in their footsteps.
Failing To Test The Market
Let’s say you have a massive stash of cash sitting in the bank, waiting to take advantage of what you perceive as a business opportunity. You start using the money to build a big factory to produce your goods, spending a fortune on marketing, plant, and equipment so that you can sell vast quantities.
Unfortunately, when the product launches, it doesn’t sell anything like as much as you thought it would. And now you’re stuck with a large amount of productive capital you don’t need.
The best approach is one in which you test the market first to see what it wants. You might think that you have a world-beating idea in the pipeline, but not everyone will agree. The size of your audience could be much smaller than you anticipate.
Business Mistakes: Failing To Take Out Insurance
As a business, insurance is one of the most powerful ways to protect you from legal and regulatory risks. Companies that have the right cover can avoid being shut down by massive legal bills and compensation payments.
Bizarrely, though, a lot of companies fail to take out the necessary insurance to keep their operations running. The basics, like public liability, are essential. But so too is key man insurance – a type of payment that will keep your company afloat if somebody you rely on gets seriously sick and can’t work.
Failing To Grab A Partner
Single founders struggle to get companies off the ground. They find themselves overloaded with tasks and must continually use their evenings and weekends to do all kinds of admin, usually when they are in an exhausted state.
When you look at most of the great businesses in the world, they had more than one founder. While certain entrepreneurs tend to grab the limelight – such as Steve Jobs – they all got lots of support, especially in the early days. If success is your goal, team up with somebody else.
Taking Your Ego With You
Entrepreneurs have to be very careful with their egos. If you go into business believing that you always know best, you’ll wind up alienating people and losing respect.
Instead of being a hero, try to be a peacemaker. Be the guy who listens to everyone’s ideas and then makes a decision. Try not to see your company as an extension of your personality. It’s just not like that at all.