The 12 Most Common Mistakes New Entrepreneurs Make & How To Avoid Them

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The new wave seems to be pushing people, particularly Black people, to become business owners. All across Black social media channels you will see a wide array of discussions on the topic.

While I am not opposed to people becoming business owners, I have to save that in my experience a large number of people who start their own business do not realize how much work and time will be involved. Most fail to do any authentic primary research and as a result get overwhelmed and die out....

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The very first thing any person looking to start a business should be asking themselves is whether you are in fact ready to start your own business.

  • Do you have an entrepreneurial mindset? 

  • Are you committed to spend all the time you need to succeed? And are you ready to take massive action?

You need to go in with a full understanding that you will have to wear many different hats. It's not an option. You have to realize that success will not happen overnight and that it may take a year or two or three...before you achieve your expected results. You will be the CEO, the general manager, the accountant, the salesperson, the computer technician, the secretary, the receptionist. 

Mistake # 1 - Failure to spend enough time researching the business idea to see if it's viable 

Moment of Truth: Most new entrepreneurs fail because they were never truly interested in the business itself; they were more interested in making the money. You've got to start something that you really like, and by really like...I mean something that you can continue to do even when the money slows down.  This is what you will be spending a lot of time working on and building. The goal is make money while doing something you truly love to do. 

Your assignment - Spend all the time you need working on your business plan, which should include: your mission statement, your business strategy, research on your target market (demographics), industry analysis (size, economics, trends, success factors, challenges, etc.), your marketing plan, your financial projections and sales.

Mistake # 2 - Failure to determine whether the business actually adds value

The more sustainable businesses, those that withstand the test of time, provide value by performing a service that people need and can use.  Again, this does a big ol' hop-skip-jump back to knowing your business and the industry that you are in.  You have to know if there is n actual demand for the service and/or product you are offering.

Your assignment - Make sure your products or services provide value and benefit to your clients. Be ready to solve any business problems that your clients may have.

Mistake # 3 - Failure to gain a complete and total understanding of the business

Every business has drivers; hot buttons and key levers. What drivers exist in your business? One piece of advice that all of the successful business leaders, executives and management consultants would say leads to success would be largely paying attention to detail.

Your assignment - Understand all the aspects of your business, and of particular importance, know how to present them in an easy and simple manner.

Mistake # 4 - Failure to describe the business in only one or two sentences

No doubt you've experienced the entrepreneur whose business is so technical or complex that he cannot explain the concept in plain English. Or, it takes 20 minutes to convey the purpose of the business. What value or benefits does your business offer? 

Your assignment - Have an efficient 15 to 60 second elevator pitch that introduces you, your business mission, focuses on the benefits you provide and makes you and your business memorable. 

Mistake # 5 - Failure to conduct the primary research

There are so many awesomely great ideas you can latch on to, but the key in business is to make sure the your ideas central theme or mission of your business venture will attract customers and generate sales and profits.  A great idea in and of itself is not enough to start a business.

Your assignment - Take the time to gain experience, study the business, understand what makes the business work (how to serve the customers and generate profits) and what leads to losses. 

Mistake # 6 - Failure to contact professionals who can help you get started 

One of the first things I did when I decided I wanted to learn how to make money blogging was get into circles of people who were more experienced in the industry AND making money. I went to the people who were doing what I wanted to do. Most new entrepreneurs ask their friends and family for advice when starting a new business. The problem is that they often ask people who have never started a business; so in reality, these people are not in a position to offer sound advice.

Your assignment - Get a mentor or two. Surround yourself with experts who possess skills and expertise that you lack. Team up with professionals who can complement your strengths and cover for your weaknesses. 

Mistake # 7 - Failure by underestimating financial requirements

New entrepreneurs come into the business game completely unaware of just how much money it takes to get a business going. Even in the most cost-effective industries, where all you need is a laptop and a dream, you will still have expenses that you will need to cover. Do you know how much capital you need to start your business? Do you know the market, did you calculate your cost, did you project your sales, do you know the number of clients you need? Do you know how long it will take before you get your first benefits or before you will run out of money? 

Your assignment - Invest the time to work on ALL aspects, especially the major ones, of your business before you start.

Mistake # 8 - Failure to make marketing a priority

Here is how it usually goes. Get an idea. Start a businessBoom...finite! New entrepreneurs start their business without a clue as to who their target is, what their niche is or what their demography is and as a result fail to attract clients, garner attention or generate income. Marketing should be one of your top priorities. Devising a marketing plan will help you determine how to promote your products or services and create a system that will generate more clients for your business.

Your assignment - Dedicate a good portion of your time and energy to working on and implementing your marketing plan. Set up a meeting with yourself once a week to work on your marketing plan and whatever happens never cancel this meeting; it is essential for your business. 

Mistake # 9 - Failure by under-budgeting the marketing costs

The world is overcrowded with millions of businesses and probably a number of those in your market perform essentially the same functions as you do. This means that you have to differentiate yourself from them by making your business stand out. Publicity is essential to your livelihood; otherwise you will not attract any customers.

Your assignment - Make sure you have a strategy that puts the word out there. Provide adequate publicity, business cards and marketing materials that project a professional image. Donít try to save money on these; they are reflecting your business. A cheap business card or flyer will not make a professional impact.

Mistake # 10 - Failure to focus on the business

I get it, you are a energetic and enthusiastic person (which is essential to success), but more than likely you can also be overly optimistic and set your pretty little eyeballs on too many targets and directions at once [guilty as charged, boss]. This results in mediocre results. You need to define your business mission as succinctly and narrowly as possible. When you move in too many directions at once, especially in the early days of your business, you are likely to fail to execute anything correctly; so you end up working on the business development more instead of working IN the business. Long story short bro, you will spend all your time operating each task on your own. You won't have the time to sit back, and decide on the best way to develop your own marketing plan, create new products, or improve your services. 

Your assignment - Know you goals. Put them in writing.  Make sure they are realistic, specific and measurable and that you set yourself a deadline to achieve them.

Mistake # 11 - Failure by over-marketing

So, like...you have developed your product or service and have perfected your offering, now you think that your offering is the best in your marketplace. That's cool. We all feel that way. You can't tell me that MY writing isn't the best thing since left over cold fried chicken at 2am. But unfortunately, to be efficient you can't sell to everyone. You need to select a specific target market and stick to it. By doing this you will have a more efficient message and will more likely achieve success much sooner.

Your assignment - Carefully determine your niche, your demography, your ideal clients, where they go, what they read, what their hobbies are, etc. Once you have a full understanding of your clients profile you will then have a full understanding of how and where to find more of them.

Mistake # 12 - Failure to follow-up with clients

Raise your hand if it takes you forever to respond to emails, follow up with emails, call people back...again guiltier than OJ here. Many new entrepreneurs are often so desperate to constantly find new clients that they neglect the clients they already have and in fact end up losing business. Statistics show that it takes seven more interactions to secure a new client than to sell more to a repeated client. So develop and maintain a useful and organized follow-up system to offer new services to your clients and don't let them slip away.

Your assignment - Constantly and consistently communicate with your current clients. 

Start a newsletter, offer special sales, create new products to up-sell, join affiliate programs if you don't have your own products. People who have already bought from you will appreciate it when you recommend other products. Statistics show that up to one out of three clients will take advantage of your new offer. It is essential to build a very, very special relationship with your clients. They are your best audience. 

Social Media:

A large number of people who start their own business do not realize how much work and time will be involved. Most fail to do any authentic primary research and as a result get overwhelmed and die out. 

The very first thing any person looking to start a business should be asking themselves is whether you are in fact ready to start your own business.

  • Do you have an entrepreneurial mindset? 

  • Are you committed to spend all the time you need to succeed? And are you ready to take massive action?

You need to go in with a full understanding that you will have to wear many different hats. It's not an option. You have to realize that success will not happen overnight and that it may take a year or two or three...before you achieve your expected results. You will be the CEO, the general manager, the accountant, the salesperson, the computer technician, the secretary, the receptionist. 

So what are the 12 mistakes entrepreneurs and new business owners make? Here's my list...

  • Mistake # 1 - Failure to spend enough time researching the business idea to see if it's viable

  • Mistake # 2 - Failure to determine whether the business actually adds value

  • Mistake # 3 - Failure to gain a complete and total understanding of the business

  • Mistake # 4 - Failure to describe the business in only one or two sentences

  • Mistake # 5 - Failure to conduct the primary research

  • Mistake # 6 - Failure to contact professionals who can help you get started

  • Mistake # 7 - Failure by underestimating financial requirements

  • Mistake # 8 - Failure to make marketing a priority

  • Mistake # 9 - Failure by under-budgeting the marketing costs

  • Mistake # 10 - Failure to focus on the business

  • Mistake # 11 - Failure by over-marketing

  • Mistake # 12 - Failure to follow-up with clients