We live in an entrepreneurial age of endless opportunities, an age where anyone and everyone with a great business idea and a laptop in hand can kick-start their own company and build a prominent name in the industry. Now, all of that might sound fine and dandy, but the process does tend to get a bit more complicated than that, especially when you consider the fact that the majority of startups fail to reach their second or third year.
This is mostly due to the lack of proper financing, management, and vision. After all, a great idea can only get you so far without a solid plan to bring it to fruition. With that in mind, let’s take a look at the five biggest mistakes novice entrepreneurs make that are ruining the progress of their companies, and how you can miss them by a mile.
Expanding Before You’re Ready
As an over-zealous entrepreneur hell-bent on making it big in the global arena as quickly as possible, it’s quite easy to fall into the trap of premature expansion and suffer in the long run as a result. It’s important to keep in mind that steady progress wins the race in the end. Instead of pushing towards getting a bigger office, or opening up new departments, or even hiring new staff members you don’t actually need, you should retain a frugal mindset and funnel money towards the most essential processes.
At least for the time being.
Besides, there are other areas where your brand can grow without having to invest in expansion, such as:
- Focusing on building a strong core employee collective
- Mastering the software and tech you use on a daily basis
- Excelling at digital marketing yourself instead of hiring an agency
- Building a solid customer foundation with what you have
- Developing new ideas and saving them for when the time is right
All of these solutions will signify growth in different ways, allowing you to plan for the future and build your brand without wasting money, or worse, risking a financial downfall from premature expansion.
Partnering with the Wrong People
Partnering up with a like-minded individual or group, preferably an affluent one, can be a great career move that may set your business up for life. Alas, this is not how the majority of partnerships pan out in the end, and oftentimes you will face more hardships with your partner than reaching successful milestones.
While it is true that very few individuals are able to create a successful startup all on their own, it’s better to be the sole leader if you know what you’re doing, than to let an inexperienced individual take the reins with you. That said, you should be looking to start your business as a partnership, as some of the biggest brands in existence were founded that way. Speaking of brands, you cannot hope to achieve long-term success if you don’t have a reputable brand to separate you from the competition.
Failing to Build a Strong Brand
In an overly competitive marketplace, branding is everything. The days of faceless corporations pushing their products and services towards their demographics are long gone, as nowadays the modern customer expects to be wooed and charmed with a brand personality that is relatable and trustworthy, one they can connect with on a deeper, emotional level.
So naturally, you need to have a comprehensive branding strategy in place that will guide your company on the path to success, boasting striking visuals and immaculate, relatable storytelling, and portraying your business in the best possible light. Remember, only by building a brand personality with a unique set of values, tone of voice, and visual identity that resonates in the hearts and minds of your demographic can you hope to set yourself apart from the competition.
Lack of a Realistic Business Plan
It should go without saying that a company without a business plan can never become anything more than an idea that constantly fails to reach its potential. After all, if you don’t have a realistic, detailed, and actionable business plan in place that will guide you on the path of long-term success, how do you expect to expand your business, or appeal to your audience in the first place?
This is why you need a comprehensive business plan as well, comprised of the following:
- Executive Summary
- Company Description
- Products and Services
- Market Research and Analysis
- Strategy and Implementation
- Organization and Management
- Financial Plan and Projections
Failing to Minimize Expenses
More often than not, startups fail not because they weren’t able to reach a certain profit margin, but because they weren’t able to minimize expenses from the start and thus keep growing even with a moderately low revenue stream. Remember, you can achieve more with less, you simply need to cut the financial leaks across the board.
So, instead of letting money slip through your hands, you want to:
- Automate wherever you can
- Outsource in order to optimize payroll expenses
- Cut overheads by running a digital office instead of a physical one
- Focus on leading a small crack team of experts instead of expanding
- Build your marketing strategy around SEO content instead of PPC ads
Building a company from the ground up has never been an easy task. This holds true even in the favorable, modern entrepreneurial environment where everyone can become a CEO overnight. Nevertheless, with these common mistakes out of the way, you can go ahead and build a successful company and pave the road to long-term success in the industry.
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