image via Shutterstock / Photographee.eu
Let’s face it; starting your new business is never easy because you’re investing time, money and resources on a ‘hunch’. In a nutshell you’re investing on something that may or may not actually work out in the end.
While most people would like to gladly work for themselves so that they can control their own their own time, not everyone has the will nor the patience to follow through with it though. Studies show that in average it actually takes around 5 years for any new business to just break even, basically you’re more likely to see any profits on your new venture after 5 years have passed which of course sounds like a bloody long time for any budding entrepreneur!
Of course, this is not always the case because a lot of entrepreneurs do reap profits almost immediately after they put up a new business – especially those entrepreneurs that provide service rather than a product. But typically, you are supposed to be looking at 3-5 yeas before you can start seeing any real profits so you really need patience if you want your business to stick around.
Now if you’re a budding entrepreneur who is interested in starting a new venture, then here are five crucial mistakes most people make that you should be aware of:
1. People don’t do their homework
The biggest reason most entrepreneurs fail is because they don’t do their homework.
The moment they come up with a good idea they want to get things going immediately without enough research or background work on this idea which of course is a big mistake! A good idea for a new business is a good start, but it is imperative that you do your homework though.
You should be asking yourself questions such as:
Who’s your target market?
Why would people buy your stuff?
What makes your business unique?
How will you market your new business?
What sort of capital and resources would you need to get things going?
How will you make the business grow?
There is no possible way any new business can succeed without proper research and background work. Keep in mind that Rome wasn’t built in a day; it takes time and perseverance for any business to grow. Just make sure you do your homework properly so that when hiccups start to show, you’re more than ready to tackle it head on!
2. People are afraid to take a risk
It’s quite simple really, no risk – no reward. The higher the risk – the higher the reward!
But in saying that though, keep in mind that you need to take “calculated risks”. Make sure you won’t get stuck at a point where you have zero dollars in your bank account because you have invested everything in the new business. Remember, it may take a while before you start seeing any profits from the new venture, -what if it takes years and years before you start seeing any profits? What then?? Are you going to live on virtually nothing until the new business “potentially” starts making any real money??
Don’t be afraid to take any risks, but in saying that, just make sure they are calculated.
3. People don’t stand their ground
If you’re starting a new business there will always be critics and detractors.
Some people will doubt your new venture because they actually care about you, they’re afraid because they don’t want to see you go down in flames. Some people will discourage you because they’re jealous that you’re actually doing something with your life and some people will discourage you because they’re just plain annoying!
The important thing here is that you stand your ground.
Take for example Darren Rowse the owner of Problogger.net. Most of his family and friends doubted him when he decided to resign from his fulltime job to become a fulltime blogger instead. Most people thought he was crazy to take this risk because he has a family to look after and blogging just doesn’t sound like an adult job! He still stuck to his guns though and eventually many years later he proved a lot of people wrong because he has become one of the most successful bloggers of all time!
Now tell me, was the risk worth it or not?
If you have an idea which you really believe in, sometimes, you just have to go with your gut and stand your ground despite what others say.
It is your life after all not theirs.
4. People don’t pay attention to detail
If you’re starting your new business you are obviously the head of this business therefore it is your job to look at the big picture – your focus is to determine how to make the business grow and expand. Now because most new entrepreneurs are so focused in the big picture, they tend to overlook the less important details. This is definitely not good because later on down the track these little bits and pieces will eventually haunt you and your business.
If you can’t look into the finer details of your business then at least make sure that you hire people that will look into it. Your business needs a solid and stable foundation before it can really grow into a money making venture. The little cracks that you ignore now will eventually build up and become big cracks and before you know it your business is going down and you don’t even know what hit you!
5. People don’t network
Your business will never succeed if you don’t know how to network and connect with others.
Start mingling with people who are actually successful in their businesses and learn from their experiences. Start going to functions and events and start connecting with potential sponsors and investors within your field. Networking is one of the key components in any new business, the more you network the bigger your database gets and the more people you attract to your business.
It’s simple really; you have to prioritise building relationships rather than making money because if you focus on building relationships first then money will eventually follow.