In the spirit of pursuing our dreams we are indoctrinated into entrepreneurship. The following are the most common first year business mistakes mentioned by entrepreneurs whose businesses have failed.
1. Insufficient Capital to Launch
I had an idea and I decided to act on it. I began thinking about the possibilities and developed my plan as best I could. I spoke to others in the same area but none of those people were business people. They gave me great advice on many things but I never pinned down the operational costs. Those costs were much higher than expected and I ran out of money much sooner than expected.
2. Lack of Delegation
At first it was just me. Then I started to bring in key people to assist me but didn’t assign specific tasks and provide proper guidance to accomplish specific goals and free up my time. I remained overwhelmed and scattered and the goals were never reached.
3. No formal Business Plan
I had a plan in my head but nothing to reference when major problems occurred. I was operating on the fly and it was all good until I we hit the wall.
4. No Budget
It’s a startup so we need to spend, spend, spend, because it takes money to make money. Unfortunately, without a budget we burned through the money and ran out before I knew it with a pile of unpaid bills.
5. Misappropriation of Funds
I spent the money on the wrong things and without the budget didn’t have the money I needed for the things that were critical when the time came.
6. Unprepared for Growth
I got more business than I knew how to handle and was unable to fill orders and it ended up costing me customers, referrals and ultimately my business.
7. No Marketing, PR or Social Media Budget to Support Sales Team
We launched slow and easy and then flat lined. We had no momentum and everything came to a grinding halt. We needed more exposure but didn’t have the budget for the critical services such as marketing, public relations, social media or a sales team.
8. Inconsistent Messaging
Our messaging was not consistent and gave a confusing message to customers/clients. It resulted in a lack of credibility and clients were reluctant to sign up as a result.
9. Hiring: The Wrong People, Too Many, Poor Timing
I hired someone with insufficient experience to save some money but it ended up costing me more time dealing with the problems that came with that hire and I lost time having to find a replacement. Or, I hired too many people to fast and didn’t have the work for them. When things slowed further I got stuck paying out more in salaries than I could afford.
10. Purchasing Hard Assets instead of Leasing Them (tying up capital)
I was so confidant in what I was doing I invested capital too soon into equipment or services and then didn’t have that capital for critical things that I needed soon thereafter that created a liquidity crisis.
11. Quitting Too Soon
It seemed as though the obstacles just kept getting higher and they would never end. I figured it was just time to throw in the towel. In retrospect, had I just resolved just a few problems I would have been home free and in clear. I simply let negativity get the best of me.
Every new venture exposes new challenges and experiences, not just about business but also yourself, Enjoying the journey. Solving challenges one at a time and draw from every resource available to get closer to your goal. Even what appears to be a failure is merely knowledge to put to use to help you achieve your goal. Follow your desire and keep reaching for your dreams.
