Are you an aspiring entrepreneur? If so, then you’ve got big dreams for your soon-to-be business, along with plenty of ambition behind those dreams. Unfortunately, the sobering fact is that about half of all new businesses will fail within the first several years. And while there are many potential factors that can contribute to a business failing, there are a few common mistakes entrepreneurs make that can lead to failure—regardless of the industry.
1. Ignoring Advice.
One of the most difficult aspects of being a new entrepreneur is fielding advice and recommendations left and right. While it’s great to receive well meaning advice, you want to do your own thing and you want to do things your way. After all, that’s part of the reason you decided to start your own business. Unfortunately, ignoring sound advice when it’s given to you can lead to serious failures down the road. The key is parsing out which advice is worth following. Generally, if you’ve got someone in the industry who is more experienced than you telling you to do (or not do) something, that advice is at least worth considering.
2. Anticipating Perfection.
By their very nature, many entrepreneurs are also perfectionists. In business practice, this can be both a blessing and a curse. While it means you’ll always be striving for what’s best for your company, it also means you might be disappointed or come down too hard on yourself when things don’t go exactly as planned. A more practical mantra to follow is to strive for perfection, but accept that it’s impossible to achieve (and learn from your mistakes along the way).
3. Not Knowing Your Business Model.
You’re an entrepreneur; of course you know your business model like the back of your hand, right? Think again. Many entrepreneurs don’t know their business models quite as well as they think they do, and they end up in a lot of trouble as a result. Aside from having written out a detailed business plan, you should also always know where you stand from a financial standpoint in terms of cash flow. And sometimes, where your business stands right now might not line up with your projections. How you handle these types of situations will influence your success down the road.
4. Tackling it All Yourself.
A sense of independence and self-motivation are two key characteristics of any successful entrepreneur. On the other hand, it’s important that new entrepreneurs avoid the common mistake of trying to tackle everything themselves. Know how to recognize when you could use some outside help, whether it be from a business accountant or even an industry mentor. And of course, realize that there’s going to come a time (if there hasn’t already) when you will need to hire employees in order to take your growing business to the next level.
5. Hiring the Wrong People.
Your business needs employees, but it’s important to avoid one of the most common mistakes here: hiring the wrong people for the job. A lot of times for new entrepreneurs, this means hiring close friends or family rather than embarking on a legitimate talent-seeking journey, and the results can be disastrous. There are a lot of important considerations to keep in mind when it comes to hiring your company’s first employees. Aside from making sure they have the right credentials and actually know how to perform the job(s) you need them to perform, you’ll also need to be sure they’ll fit in with your company culture.
6. Getting Spend-Happy.
This one may seem a little more obvious than the rest, but it’s still worth mentioning. New entrepreneurs (and especially young entrepreneurs) are notorious for over-spending, especially when they’ve recently received funds from banks or private investors. This is why it’s so important not only to carefully track all your business spending, but to take a step back occasionally and make sure you’re not over-doing it or spending your company’s funds on frivolous things (like that break room espresso machine).
These are just a few of the most common mistakes new entrepreneurs make. Fortunately for you, many of them are easy to avoid with a little introspection and self-awareness.By avoiding these all-too-common mistakes, you’ll set yourself (and your company) up for greater chances of success both now and down the road.