Do you know the common mistakes entrepreneurs make, even in 2021? According to statistics, over 61% of new businesses fail between two to nine years for several reasons.
For some, it’s the laws and economy of the nation while for others, it’s the common mistakes that entrepreneurs make.
Most entrepreneurs make mistakes, especially the new ones but they do not talk about those mistakes as often as they should to educate the upcoming ones.
However, we have put together a list of these simple yet common mistakes and how to avoid them.
Are you about to start or launch your own business? This article is for you.
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7 Most Common Mistakes Entrepreneurs Make In 2021
Either you’re considering being an entrepreneur or you’re about to start your business, below is a list of seven common mistakes entrepreneurs make and how to avoid them in 2021.
1. Inadequate capital
One of the most simple yet common mistakes entrepreneurs make in today’s world is the inability to provide adequate capital.
Generating funds can be quite difficult for new entrepreneurs, especially if you don’t have multiple investors.
Some people proceed to start the business without putting enough money together to start with the thought of generating the rest as the business grows.
It doesn’t always happen that way.
How to avoid it: It’s better to get adequate funding that will last up to three to six months for the survival of the business. You can also source funding immediately after startup for two to three months.
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2. Setting unrealistic goals
What’s a successful business without a concrete plan? It’s important for entrepreneurs to set goals but making it unrealistic would be setting your business up for failures.
A business plan should give your business a direction and also help you convince investors to support your idea with funds. This plan needs to be in sync with the level of your business.
How to avoid it: As much as you have great ideas and big goals, ensure you make them realistic and flexible to accommodate the changes and risks over the years.
3. Picking the wrong partner
Starting a business with a partner is pretty common, especially if the business intends to upscale after a set period of time.
Picking a partner that supports your business can be quite tricky. Just because someone is your friend or family member doesn’t qualify them to be your business partner.
How to avoid it: The primary criteria for choosing the right partner should be sharing the same vision and objectives. A partnership is like a marriage. You need to be able to meet at a reasonable point for the growth of the business.
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4. Inadequate market research
Another common mistake is not conducting detailed market research on your business idea.
Market research is done to help you discover the size of the market, your competition, target audience, nature of competition and how to penetrate the market.
Some entrepreneurs rush these processes without getting proper and detailed information on what the market research is supposed to achieve.
How to avoid it: Take enough time(months) to conduct adequate/detailed market research to achieve these purposes in order to build a successful business.
5. Hiring the wrong people
Hiring the wrong people is one of the common mistakes entrepreneurs make. This can happen when you hire too quickly or not having adequate knowledge about the roles for which people are hired.
Some entrepreneurs think they can build the drive of employees with time, but this isn’t always the case.
Also, some hirings are done for simple roles that the current employees can take up.
The wrong team can stunt the growth of any business or company.
How to avoid it: As an entrepreneur, you need to be knowledgeable about the positions you’re hiring for.
Also, ensure the workload have increased before hiring other people.
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6. Indecision on the target market
If you can’t decide and study your target market, the growth of your business is liable to suffer.
It’s okay if you want your business to be patronized by many people but you need to narrow the group of people you’re trying to reach.
Inability to do this affects your brand influence.
How to avoid it: During your market research, ensure you decide on the group of people to be reached. It helps you communicate and engage with your prospective customers.
7. Monetizing without creating value
The purpose of starting any business is to make money, but most entrepreneurs want to do that without creating value.
Once people can’t lay their hands on what they’re actually paying for, then your customer bank will keep reducing and retaining old customers will be difficult.
You need to ask yourself these questions;
- What solution is your business providing?
- What makes you unique?
- Are your products/services cost-effective?
How to avoid it: Creating value should come before monetization. Ensure your business is creating value and standing out amongst competition hence, monetization becomes easy.
If you can pay attention to these common mistakes entrepreneurs make, then you can avoid them.
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