Starting a business is the dream of every entrepreneurial-minded person. However, starting the entrepreneurial journey is like venturing into new territory that you know nothing about; you certainly will experience wins and challenges in equal measure before you can learn the strings.
At the onset of your new business, you will be handling many things at the same time, from being the manager, salesperson, CEO, cleaner- you name it! Mistakes are bound to happen in the midst of all the chaos, particularly because you are not an expert in most of the roles you fill. Nevertheless, you can avoid making mistakes by knowing the common ones that new business owners make beforehand. Read on to discover the 3 commonest mistakes that new business owners make.
1. Ignoring competition
Unless you are one lucky visionary to spot an opportunity before everyone else, your business will have to deal with some sort of competition, either directly or indirectly. Even before you launch your products or services to the market, someone was already serving your target customers, or the customers had their own means of satisfying the need you intend to help them solve. After all, you will not be inventing a new problem; you will be attempting to solve a problem that existed long before the wheel. That means you will have to present better solutions than the existing ones if you are to cut out a niche for yourself.
Knowing your existing competition is the only way you will be able to define your value proposition. Most new business owners fail to understand this- the excitement surrounding a new product and business can easily lead anyone to think that there will be no competition. Be careful not to fall in this category. Even when you are the only player in the market, you still need to be careful not to overlook any blind spot. You can only gain such valuable insights after thoroughly assessing the market share held by other players in your niche.
2. Trying to run a one-man show
At the start of the business, every business owner wants everything to start and run smoothly. As the owner of the business and vision carrier, they feel that no one else can execute things as good as they can.
Trying to handle every operation on your own is a common mistake that can easily lead to burnout. Instead of everything going on meticulously, it can result in failure and some important details falling through the cracks. It is important to understand that there are operations that are beyond your knowledge scope. If, for instance, you want to set up a company in China, you will need to acquire the right licenses and ensure that you have the right standing in legal matters. Hiring a legal consultant will prove to be a better option than muscling your way through. You also need an accountant for your matters tax and accounting operations.
While you may be looking for perfection, or are trying to stay within the budget, don’t forget that outsourcing some services is good for you and the business. Learn to delegate some tasks to your employees. That way, you will have enough time to focus on matters than really need your attention like growing the business.
3. Failing to define the ideal customer
A common phrase with most new entrepreneurs is, “Build a product and they will come.” Such come from a point of thinking that their product is set to revolutionize the market. They fail to define their ideal customers, so they roll out into the market blindly. While such entrepreneurs may sell a few products, they rarely achieve much growth.
Before launching your products or services, it is advisable to identify the people who appeal to your product. Having such insights will inform your marketing and advertising decisions, pricing strategies, as well as the sales efforts you must employ.
How do you define your ideal customer?
· View your product from the customers’ point of view to identify what need your products solve for the customer.
· Depending on your product or service, determine the age, education, financial standing as well as occupation of your target customers.
· Compare yourself to the competition to identify why your ideal customer would choose to buy from you. What difference do you make for them to keep coming?
· Identify the location of your customers.
· Determine the season and time of the year that your ideal customers buy the most.
· If you have several avenues that you sell your product, which does the customer prefer? What are their buying strategies?
Mistakes for a new business owner are to be expected considering that it is a new endeavor with no clear view of what lies ahead. However, fatal mistakes can easily lead to business closure.
Nevertheless, whatever may come, it is good to be realistic in every aspect. That way, you will be positioned to avoid mistakes such as the above.