All entrepreneurs start their businesses seeking to positively impact the lives of their customers. However, just having great ideas isn’t enough for running a business. It calls for avoiding the usual errors every business owner tends to make in the course of their entrepreneurial journey.
Every business owner does commit their fair share of mistakes before turning successful. This blog is an attempt to engage readers on common mistakes business owners to make that can be easily avoided. It will help entrepreneurs steer clear of the most obvious business errors that they are highly prone to.
The Obvious and Easily Correctable Small Business Mistakes
1. Flawed mindset
Some small business owners get so enamoured by the success of known entrepreneurs that they forget the sweat and toil of these famed entrepreneurs. They begin to envision a future where they expect everything to be effortless. However, this is far from the truth. Building a business is difficult; it takes a lot of persistence and perseverance to make a business work. Most newbie small business owners must enter the business arena with dedicated long-term commitment; only then the possibilities are likely to blossom.
They must understand business success combines consistent effort, great perseverance, and a little bit of luck coming together at the right time. Any entrepreneur must understand the long-term commitment and the degree of hard work involved in building a successful venture. Without this kind of mindset, it is extremely difficult to remain on track while establishing a great business. This can be a primary business mistake to avoid by a small business owner.
2. Underestimating competition
Having a sure-shot product does guarantee a certain degree of success; this by any chance does not make things easy for you in the long term. Several players are eager to enter the market space and give you a run for your money; hence, it is always a good idea to have healthy respect toward the competitors. You may never know when another product might just click and grab a chunk of the market share.
The effort should be on consistently improving the product and keeping a close eye on the competition. By improving the product, you retain your position and keep the competition in check. A good example of this is Google, right from being a start-up, it has always stood its ground for innovation and has helped evolve its search engine for what it is today. This can be one of the biggest business mistakes to avoid.
3. Taking customers for granted
You might turn nostalgic thinking about your first customer, the first deal that you cracked, and the extent you went to keep your customer happy. If you think you have slowed down a little, then it is definitely the time to “pull up the socks,” revisit your priorities, and put the customers where they belong—right at the top.
We have to remember that apart from our employees, customers are our biggest asset and keeping them happy is the key to better business prospects. Moreover, we need to remain sensitive to their concerns before they decide to go elsewhere. Therefore, treating customers well is always a good business strategy and turning them into loyal followers is worth the effort. Taking customers for granted is one of the common mistakes small business owners make.
4. Overlooking learning opportunities
The world is rapidly changing at a frantic pace, and it is imperative for business owners to not underestimate the fast-evolving technology landscape and domain-related developments. As a business owner, it is prudent to always have a learner’s mindset.
It is not solely about starting a business and running it; it is also about being aware and on the lookout for improvements within the business. Seeking new opportunities helps improve the existing systems and processes of the business. This calls for not overlooking learning opportunities that come in via multiple channels and mediums. Remaining open to learning and implementing can do tremendous good to the overall well-being of the business. Additionally, there is a good chance of committing business plan mistakes.
5. Overlook planning
This is one of those obvious things expected of a business owner. But at times, it is also something often overlooked and replaced by working on past experience and guesswork. This could be a strategy that may work in the short term, but for the long term, it is really imperative that we proceed with a business plan.
For starters, one can carry a simple notebook, with pages devoted to different aspects of the business, namely operations, finance, and marketing, with a to-do list in each one of them. Moreover, start noting down the random thoughts that occur in the spur of the moment. At the end of the day, reassess the to-do list and give priority to implementing thoughts that have the potential for high returns. These common errors in business plan formulation should be kept at bay.
6. All work and no play
While it may be hard work running a business, it may not really bring great results if all your waking time is spent running the business. More effort is only likely to bring the “law of diminishing returns” without any value addition. It may altogether become counterproductive when looked at from another perspective.
This means entrepreneurs need to take that much-needed break to recharge their batteries. It can be spending time with the family, joining a gym, or cultivating a hobby—anything that takes the mind away from the business. This will help bring in new energy to the business and you may even notice—you become more creative and effortlessly engaged in the business compared to the past. Not taking a break is one of the common business mistake examples.
7. Never ask for referrals
As mentioned earlier, your customers are your biggest asset, then why not leverage this asset to your advantage? Specifically, if you are spending a sizable portion of your budget on marketing to reach out to your customers, then why not take another step and ask for referrals from them? Some entrepreneurs may feel it is unethical and cause embarrassment to both parties involved. This is a common business mistake to avoid.
Unless you ask, you may never know if your existing customers can open new possibilities for your business. There are many examples where businesses were able to expand on growth solely through sales referrals. Ultimately, it is all about making use of that proverbial “low hanging fruit” to improve your business prospects.
8. Cutting product prices
The first thing most small businesses resort to when the going gets tough is to cut down on product prices; conventional logic might say it will bring in more customers. However, it can also turn against your business's health.
A large chunk of the customer base is focused on quality and convenience, and by slashing the price, you cannot expect to attract customers. Even during harsh economic conditions, you need to improve the product and pass on the benefits to the customer with enhanced pricing. Slashing prices brings in an accelerated death of the business within no time.
9. Not acting with integrity
As a small business owner, you are likely to make a wrong move one time or the other with your partners, customers, or other stakeholders within the business. While you may be tempted to cover up or leave it behind, it may so happen that the word gets out about the whole ordeal. With the internet and social media, negative news is likely to get around fast, bringing in more problems for you and the business.
The situation calls for the entrepreneur to act with integrity and remain upfront about such ordeals or situations with relevant stakeholders in the business. Once you clear the air right at the onset, the chances of the event having any future repercussions are extremely remote. Overall, it is about acting with transparency and integrity in all transactions in the business.
While it may be prudent for business owners to keep a check on their spending and not overspend, this may at times amount to a situation where the entrepreneur becomes averse to the idea of spending altogether. This in the long term is not going to work out in the interest of the business. As an entrepreneur, it is wiser to have financial planning and budget allocation for all expenses that propel business growth.
All these puts together are the top 10 business mistakes that can be easily avoided by an entrepreneur or small business owner.
While it may not be entirely possible to avoid mistakes on the entrepreneurial journey, it becomes important to learn from the mistakes along the way. Errors need to be treated as feedback by all entrepreneurs for them to be successful in the long term. Overall, it is about long-term commitment, hard work, and perseverance.
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Q. Is every entrepreneur likely to make mistakes?
Ans. In most cases, yes, as the reality of the business environment is far removed from what is learned in textbooks. Otherwise, the entrepreneur needs to come from a business family with enough scope for advice and mentoring from family members.
Q. Does making mistakes slow down business growth?
Ans. Making mistakes needs to be seen in a different light by entrepreneurs. It is the necessary “learning curve” every business goes through. Unless and until an entrepreneur assimilates learning correctly, the chances of success are remote.
Q. How much does making mistakes impact the motivation of an entrepreneur?
Ans. Yes, it does impact the motivation; however, when you are in it for the long-term, you need to be prepared for these “stumbles” in the business. It can be viewed as the “necessary evil.”