It’s inevitable that you’ll make mistakes when you’re launching a new business. The key is to ensure that your mistakes aren’t fatal or don’t have a severely negative impact later down the line. While you can’t expect to get everything right when bringing something new into the world, it’s always important to minimize the risk of errors as much as possible.
And one way to do that is to look at the mistakes that other entrepreneurs have made. Their mistakes can be a lesson for you just as much as they were for the entrepreneur. In this post, we’ll run through those common mistakes.
Insufficient Market Research
It’s one thing for you to believe that you have a good business idea. But it’s another thing for other people to think you have a good idea. And really, that’s what counts. It’s much easier to build a successful business if the idea has already been validated before you’re too far along the journey. And the way you do that is by conducting extensive market research. This is the point where you’ll learn if there’s market demand, who your competitors are, what your customers are looking for, and much more. If all those signs are good, then you’ll be much more likely to find success. And if you don’t have the answers to those questions? It’ll be a big — and unnecessary — risk.
Overlooking the Legal Aspects
Many entrepreneurs are so focused on putting together their businesses that they forget about their legal responsibilities, such as registering their businesses. While this aspect isn’t the most exciting part of getting your business off the ground, it’s a crucial step that ensures that your business begins its life correctly. You’ll need to protect your intellectual property, choose the right entity, and register your business. You can do these things later, but it’ll be a lot more complicated and cost a lot more money.
Doing Everything Themselves
Your new business will be your baby, and you’ll be happy to do all of the tasks yourself. After all, if you want something done your way, then you have to do it yourself. Plus, it’s an efficient way to save money, which you are unlikely to have an endless supply of. Alas, this thinking is actually incorrect. For one thing, it’s not about taking care of all the tasks but about doing them right — and as talented as you may be, you’re unlikely to have all the skills/experience to deliver all the jobs to a high standard. Plus, it’ll just take up too much of your time, which you should be spending doing other value-adding tasks.
You don’t necessarily need to hire full-time employees (in fact, it’s probably best you don’t). Use part-time employees and outsourcing services until you’re up and running.
Pricing the Product Too High/Low
Finding the right price for their product often catches new entrepreneurs out. After all, there isn’t a set price that you should set for your goods. It’s up to you, and that can be challenging. Many entrepreneurs fall into the trap of pricing their products too low (to win customers) or too high (to begin generating profit). Both of these strategies can be fatal. Instead, it’s best to use conjoint analysis. There are plenty of examples of conjoint analysis that outline how businesses use the method to set prices for their products. Ultimately, you’ll want to have the price as accurate and as fixed as possible when you first launch, rather than making big adjustments later on, so put the power in the hands of conjoint analysis.
Launching Too Soon/Late
New entrepreneurs often fall into the trap of launching too soon or too late. If you launch too soon, then you may have too many teething problems that ultimately end up causing brand damage. You need to be ready to deliver value to clients. Essentially, you need to have all the necessary pieces in place that allow you to work as a functional business. On the other end of the spectrum is launching too late. Remember that things only have to be ‘ready’ for you to launch; they do not have to be perfect.
Expanding Before Their Ready
There’s nothing more exhilarating than finding success with your new business. It shows that your idea is good and that your business has legs. Still, it’s important to walk before you run. Expansion is a good thing for businesses only when the business is ready to do so.