Starting a business is a risky endeavor, even for seasoned professionals. The good news is the common pitfalls can be avoided by identifying and understanding them.
Hiring who you know, rather than who is best
As a first-time entrepreneur, you may be tempted to hire people you know looking for work. Perhaps it’s a friend or family member who has expressed an interest in working for your company. While this can be a good way to help out someone close to you, it can also lead to problems down the road if their skills don’t match what’s required of them on the job. Hiring based on skill set rather than who you know and trust is best.
Not having a great product or service
Even if you don’t want to compete on price, which many small businesses do because they can’t afford to compete on service, you still need to have something unique about your product or service to succeed. Without this unique element, your customers will go elsewhere and find someone offering something better than what you’re offering them. Their loyalty goes with them when they do that, and they may never return.
Not mastering your finances
Your financial management skills are crucial to the success of your business. Whether you’re a first-time entrepreneur or have been in business for years, there are always ways to improve your money management practices. Here are some tips for getting started:
- Make a plan. You need to know where your money is going and how much of it you have at any given time. A good approach is to set up a budget and stick with it so that you don’t get over your head financially and become overwhelmed by stress.
- Keep track of expenditures and revenue streams throughout each month to see where new trends may be emerging for both positive (new clients) and negative (increased expenses). This will allow you to make more informed decisions about future spending plans based on what has worked well in the past versus trying out something new without knowing how much impact it will have on cash flow over time.
Expecting everyone to work as you do
As a founder, you may think that you can expect everyone to work as you do. And while it’s true that every employee should be working hard toward the success of your business, it’s important to understand that not everyone works the same way. Some people are better at communicating than others or have different strengths and weaknesses in their work performance. If you want your company to succeed and thrive, then it’s vital for you as an entrepreneur to be flexible and adaptable when dealing with employees who don’t use the same approach as yourself.
The good news is that being understanding of others’ differences doesn’t mean compromising your values; instead of trying to force employees into becoming like yourself, try looking at ways that each person fits into the bigger picture of what makes up a successful organization. By taking this mindset into account when hiring new workers, conducting performance reviews or giving feedback on projects completed by existing staff members (and even vendors), entrepreneurs can improve workplace culture by promoting positive relationships amongst all parties — including themselves.
Spending too much time in the office
A first-time entrepreneur’s most common mistake is spending too much a in their office. In the early days of your company, you need to be around the office to build culture and relationships with employees. But once you get going, you don’t need to be at work for every single hour of the day.
You will not be able to hire someone better than you at managing your team if you don’t give yourself some space from them — which means working from home occasionally or taking a few hours off during certain days.
Letting ego get the best of you
Ego is a big problem for first-time entrepreneurs. It’s easy to get caught up in our ideas, convinced that they are the best and the only ones worth building. But when you’re starting a business, it’s important to let go of your ego and listen to others around you.
Ego is also one of the biggest reasons why people hire unqualified employees. If you think everyone around you is beneath you because they don’t have your degree or experience, then it will be hard for them to give advice or help out with your business in any way other than as an employee who does exactly what he’s told without thinking twice about whether it makes sense or not.
Doing everything yourself
Being an entrepreneur is hard. There are plenty of things to worry about, and you can’t do it all yourself. One of the most common mistakes first-time entrepreneurs make is doing everything themselves — which means they take on too much risk and don’t realize their true potential.
If your goal is to build a successful company, there are specific tasks you should outsource or delegate entirely to other people who can do them better than you:
- Hire someone else as your accountant instead of doing your taxes every year.
- Get a lawyer to review contracts before signing them instead of trying to learn the legal language yourself.
- Make sure HR processes are in place so employees can get paid on time, rather than having that be your responsibility every month.
First-time entrepreneurs must be willing to learn and adapt
As you begin your new journey, it is essential to keep in mind that you are not perfect. Even the most seasoned of entrepreneurs make mistakes — and that’s okay. The key is not to make the same mistake twice. You will learn from your mistakes and adapt as you go along.