Four Common Mistakes New Entrepreneurs Make

 

Nearly every entrepreneur has made mistakes at some point during their careers. Here are a few common mistakes that new entrepreneurs make that are best avoided:

Spending too much or not spending enough

When it comes to making money as an entrepreneur, there are two basic mindsets: spending the bare minimum and spending money to make money. While neither attitude is inherently wrong, taking them to the extreme can be detrimental to entrepreneurial success. The key is judgment. Spend little when it is for internal items that have less impact on operations. Spend more when warranted by an opportunity or tremendous process improvement.

Trying to do it all alone

Entrepreneurs have to wear multiple hats from time to time, but this doesn’t mean they must multitask to become successful. In fact, multitasking reduces effectiveness, so it’s best to hire different professionals to take on different tasks. These can include web developers and bookkeepers. The key is to know your strengths and when you are being spread too thin to deliver the best results. If the task requires large blocks of dedicated focused time or must be re-visited very frequently in a day to accomplish acceptable results, it is likely better to hire someone else to produce this success so you can focus on the larger strategic goals, business development, and delivery optimization.

Ignoring marketing

Many new entrepreneurs have the idea that the customers will come if they simply provide a product or service. Unfortunately, this isn’t always the case. Marketing is still necessary to introduce customers to a product, especially if it’s revolutionary and has not been introduced to the market previously. The key is to understand what you are selling and who needs or wants the product or service. And if you are not sure, start a focus group to better identify. Re-evaluate your marketing strategy frequently during the startup and growth phases of your company.

Not saving enough

Time, effort, and money are all essential for starting a successful business. Yet many new entrepreneurs fail to save enough money to sustain their companies. Having a good nest egg not only ensures business operations continue, it also helps entrepreneurs focus on their businesses without the stress of having second jobs. The key is to realize that you may need to float a loan or make a “cash call” to help your business in times of slow business or additional unexpected expenses. Maintaining good cash flow in the business will help mitigate such situations, but having good personal liquidity and a strong credit rating is very helpful as well.

About the Author:

The president and chief officer of PHM Design, LLC, Carl Byington is a professional engineer with successful businesses in NY, PA, and GA. He and his team provide engineering consulting services towards the design of prognostics and health management (PHM) systems. Possessing over three decades of experience in his expertise areas, Carl Byington has demonstrated his unique ability to balance success in both technical achievements and entrepreneurial pursuits.