10 mistakes entrepreneurs make – and how to avoid them

You've tried to start a business before and failed, or maybe it just didn't work out for you. Don’t beat yourself up! There are many reasons why businesses fail but the most common is because entrepreneurs make mistakes early on in their careers.

28 Dec 2021

10 mistakes entrepreneurs make

You’ve tried to start a business before and failed, or maybe it just didn’t work out for you. Keep reading! There are many reasons why businesses fail but the most common is because entrepreneurs make mistakes early on in their career which can determine how successful they become later down the road.

So don’t beat yourself up over these minor blunders; instead, learn from them (and others) by making sure not to repeat any past failures moving forward into your next venture.

In this article, we are going to talk about 10 mistakes entrepreneurs make and how to avoid them in your journey to success.

Mistake #01: Don’t do any research

When starting a business, it is important that you do your research and know what you are getting yourself into. This means studying the industry you plan to enter, as well as your target market and competition.

It is also important to have a solid business plan in place so you can map out how you will reach your goals and service your target group.

How to avoid it: Do your research! 

Make sure you know everything there is to know about the industry, your target market, and your competition before starting your business. Also, make sure that you know what your target group needs and how you can serve them with the best experience. 

When you have researched those topics you can build a solid business plan in which you can track your progress along the way. 

Keep in mind that research never stops. There are continuous changes all around you in which you need to adapt your business to create the most suited solution.

Mistake #02: Not having a clear vision and goals

When starting a business, it is important to have a clear vision and goal in mind for what you want your business to achieve. This could be for example to help 1 million entrepreneurs or to reduce plastic waste in a certain industry. 

Without this, you will likely be unfocused which results in a business that “ just does something”. In order to grow your business, you need to solve a problem, and this problem can only be identified and solved with a clear vision and goals to focus on.

How to avoid it: Set goals for your business and make sure they are SMART (specific, measurable, attainable, relevant, and time-bound). This will help you keep track of your goal and focus on what is important for your business. In addition, SMART goals are made to make your goals achievable and to keep track of the performance which will massively help you.

Mistake #03: Failing to create a brand identity

In most business cases you have close competitors and one way to differentiate yourself is to create a brand around you as an entrepreneur or around your business.

A strong brand identity can help set your business apart from the competition and make it more recognizable in the market. If you don’t take the time to create a branding strategy early on, it can be difficult to do so later on.

How to avoid it: Start creating your brand identity from the beginning. This starts by looking at your vision and what kind of target group you have as this will determine your style and brand identity. 

If you have figured this out it is time to develop a logo, choose colors and fonts, and craft other elements that will show your business and the purpose behind it.

Brand awereness

Mistake #04: Not having a website (or a poor website)

Believe it or not, but your website is one of the most important aspects of your business! It’s the first impression people have of you and can make or break deals. Plus, potential customers may never even know about your business if you don’t have a website. It is part of your brand identity and some most online businesses it is also a direct part of the customer journey. 

How to avoid it: Invest in a website that looks professional and is easy to navigate. This means hiring a web designer if you don’t have the skills yourself, and also making sure your site is up-to-date with the latest trends and technologies. Keep an eye on your website’s analytics so you can track how people are interacting with your pages (and make changes accordingly).

Mistake #05: Not planning for growth

As your business grows, you will likely need to create a team, hire more employees, expand your product or service line, and move into a new office space. If you don’t plan for this growth ahead of time, it can be difficult to do so later on. Especially, if your product is not scalable. 

For example, you provide workshops. There are only a few hours a day you can provide those and without other people giving those workshops your growth is reaching the ceiling very fast. 

How to avoid it: Plan for growth in the early stages of your business. Find a way to make your product or service scalable, for example, by providing your workshops online.

In addition, anticipate how much staff you will need as your company expands, what products or services you may want to offer in the future, and what kind of office space you will need. Make sure to include these details in your business plan. This will make sure you are not clueless when it is time to take the next step.

Mistake #06: Not setting aside money for taxes and expenses early on

When starting a new company, mistakes can often happen and mistakes usually mean unexpected costs (such as paying legal fees). If you aren’t able to pay for these out-of-pocket, you could get into trouble. 

In addition, estimate quarterly payments throughout the year based on your personal income level and make sure to save enough money each month in an account that is not directly linked to your business to cover your taxes. The last thing you want is to stop your business because of some liquidity issues.

How to avoid it: Make sure you are saving for taxes and expenses early on in your career as an entrepreneur. Set aside a percentage of each paycheck into a separate account so you can work with what is left over after paying yourself (yes, set some money aside for yourself!). Try not to touch any of these funds unless absolutely necessary! You never know when mistakes could happen and unexpected costs may pop up out of nowhere.

Money 1

Mistake #07: Not having a business bank account

A lot of new entrepreneurs make the mistake of not separating their personal and business finances, which can lead to some serious trouble down the road. When it comes time to file your taxes, you will want to have all of your business expenses and income separated so that it is easy to track. 

In addition, a lot of software and payment gateways require a business bank account. If you didn’t set this up in time you might have to delay your launch as you cannot accept any payments yet.

How to avoid it: Open up a separate bank account specifically for your business as soon as possible. This will help keep your finances organized and make tax season much less stressful!

Mistake #08: Not asking for help when you need it

No one is an expert in everything, and even if they are, no one knows your business better than you do! It’s, therefore, easy to feel like you are the only one who can get things done for your business, but that is not true. 

No matter what your area of expertise may be there will always come a time when someone else has more knowledge or experience than yourself which could help with certain tasks! 

Keep in mind though – asking them doesn’t mean they’ll take up every responsibility while simultaneously being able to do all those jobs themselves. Simply listening allows others to share their thoughts and ideas on how best to handle certain problems, which can provide some breakthroughs. 

How to avoid it: When mistakes happen (and mistakes will always happen), ask someone with more knowledge or experience for advice on how to fix the problem. You can also join a community of entrepreneurs that may be able to give helpful insight into what has worked well for their businesses.

Whether this means consulting with industry experts or simply talking through problems with friends who have started companies before – don’t be afraid to reach out when mistakes pop up unexpectedly! It’s okay to not know all the answers at every given moment.

Mistake #09: Not delegating tasks

In connection to asking for help, not one person can do everything, and certainly not as well as someone else. This is especially true when it comes to your business.

Not delegating tasks means you’re not giving your team members a chance to shine. By asking for help, they can do more and better work that will benefit the company as well!

The last thing anyone wants is an overworked individual who doesn’t take time off from their job, which only leads back down the path towards burnouts or quitting entirely. 

How to avoid it: If mistakes happen because you are trying to take on too many responsibilities at once (or simply don’t have the time), try handing some of them over to another employee or even a freelancer. This doesn’t mean completely outsourcing all of your work either.

Use delegation for tasks that are easy to delegate and are not giving you energy. Easy tasks to hand over are administrative processes and setting up legal documents. This will ensure that you can stay focused on improving upon your core values while still moving forward towards success with confidence.

Mistake #10: Not having an exit strategy

While this is difficult for some entrepreneurs to consider, it is important to have a plan in place should you decide or need to sell your company one day due to an unfortunate bankruptcy or an IPO because of your great success. 

You could also use these strategies if mistakes happen unexpectedly and make it necessary for you to close down. Strategies like closing contracts with vendors early on can save quite a bit of time and money! 

However, just because mistakes may occur doesn’t mean all hope is lost, it simply means that there need to be plans set into motion before anything happens so no progress gets halted due to unexpected circumstances.

How to avoid it: Come up with a plan that outlines what you would do in the event of mistakes happening, whether this means closing your business or finding an investor. This will help keep your business on track even in tough times.

On a positive note, you can look at an exit plan for an IPO. Your business is a great success and you want to make it publicly available. The IPO process is a difficult one and if you’re not careful, it can be easy to get lost in all of the steps. 

But fear not! There are some great minds out there who have been through this before with their businesses. So make sure that your plan includes an exit strategy just like they did when selling off stocks or giving away shares to ensure success on both ends.

I had forgotten all about that

Conclusion

The mistakes mentioned above are just some of the most common ones that new entrepreneurs make, but they’re definitely not insurmountable! By following the tips listed above, you can help ensure that your business stays on track no matter what challenges come it’s way. 

We can’t all be perfect entrepreneurs. But we can learn from our mistakes and fix the things that were not our best strategic decisions, in order to ensure success for ourselves when it comes time to start a new business. 

You’ve made these mistakes before, but don’t worry! We are here to give you some tips on how not to make them again so your next business is much more successful than any of your past ones. 

Check out our platform if you want help starting your business without making these common errors or getting stuck in one stage of entrepreneurship forever because of an early mistake.

Written by Julian Oude Maatman

Graduated with a Masters in Entrepreneurship and Business Development. Passioned about setting up businesses and helping other entrepreneurs around the globe

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