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I would encourage anyone who wants to start a business to do so, and would not want to discourage anyone from becoming an entrepreneur. Enabling people to succeed in business sometimes means making people aware of potential mistakes that businesses could make. Running a business is a difficult task and it is easy to make serious mistakes. Here are some of the worst ones I have seen:
Losing focus: Some business owners completely lose sight of their original business goal and drift completely off-track. Very occasionally they are successful because of this diversion, but it is far more likely to destroy a business completely.
Underestimating sales: It is important to bear in mind that the overall goal of your business activity is to sell your product or service. Unless your business is sales orientated and earns money it is ultimately a failure.
Thinking 'small': By not pushing to reach a national or global audience with your product, you will always be overtaken by entrepreneurs in your industry who do have the ambition to do it.
Lack of research: If you enter a market without thorough investigation, it is impossible to know what to expect. You won't even know if there is a market for your product and if people will buy it.
Underestimating launch cost: Many new entrepreneurs make costing errors and expect that launching their product will cost far less than it actually does. Regardless of whatever you originally calculate, assume that it will cost twice as much.
Cashflow: This is a very common mistake that often results in business failure. A lack of cash restricts your business activities and prevents you from earning more money. Try to keep a reserve in the bank at all times.
These are all pitfalls that I have seen businesses make time and time again. I hope that by bringing them to the forefront I can help more small businesses making the same mistakes.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
