As an entrepreneur, you should always keep an open mind about failure. It must be well known that more start-ups like yours are failing than well established businesses. That thrill and excitement of making it big (especially during the early phase), will force most new business owners to ignore the looming risks.
So what mistakes should you avoid in order to improve your chances of succeeding with your venture?
1. No Backup Plans
Most entrepreneurs don’t have a backup plan for bad days. In fact, most have “faith” that their business is on the path to success.
This positivity is good, but you should always have a backup plan in place. Everyone is prone to make mistakes, and you will never know when you are going to make yours. Just because you have a business or management degree doesn’t mean that you know what situations you are going to face.
Your major clients may cancel orders. Your payments could become late. Your star employees may leave. You may record regular losses. Having backup plans in place will help you protect your venture against temporary failures.
2. Not being serious about your Financial Planning
Budget everything for your new business. In fact, you should have more financial backup initially than you put into the business. Sourcing funds can be difficult, but make sure that you have enough to bear all types of losses or setbacks that may come during the early phase.
While budgeting is going to help you avoid any financial difficulties, having enough funds will help you resolve the financial woes if they cannot be prevented.
3. Financial Way Out
Make sure to take your financial woes seriously. It is easy for entrepreneurs to go into debt. Funding is the most important question new business owners are concerned about. If you are unable to find any investors, there are a few other promising places where you can look for funds:
- Crowd sourcing – There are many websites including KickStarter where you can share your idea to fund your business. If you have a good idea (something that can change people’s lives), there’s a good chance that you could find funders on KickStarter and Crowdfunder.
- Grants – The government has many grant plans at both local and national level. Conduct some enquiries to find out what is available.
- Friends & Family – Friends and family members could work out as interest-free source of funds. You will need capital to keep your business running during the early stages until you start seeing income rolling in. Everyone can contribute a hundred or thousand dollars to help boost your business’ prospects.
4. Not Asking for Customer Feedback
This is a problem not just typical to entrepreneurs, but also to well-established companies. You must make every effort to know your customers and what they need. Your customers (even the most satisfied ones) will have something in the form of suggestions. Making changes according to these feedbacks may be more than enough to help you generate business from those prospects who have had so far held back.
We all like to think otherwise, but the ugly fact is that most of us are afraid of taking constructive criticism!