Building a profitable business is certainly not everyone’s piece of cake. It takes a lot of dedication, passion, patience, and right efforts directed in the right direction to be a successful entrepreneur.
The life of an entrepreneur seems tantalizing and glamorous also to an outsider. But a successful businessman or businesswoman knows what it takes to run a profitable business and pitfalls of not moving in the right direction.
A new entrepreneur with a dream and a brand-new start-up is like an explorer hunting for a treasure. His/her courage, energy, and optimism is on the top of the world, while he/she is highly likely to take a wrong direction with all that zeal, at the same time. A small wrong move can divert that young and energetic explorer/entrepreneur away from the treasure/profitable business.
Here are some entrepreneurial pitfalls of all the new business owners, which they must be aware of to avoid failures that can ruin their business.
- Hiring Employees Based on Personal Relationships
When the right kind of people join a business at a right time, then they can prove to be useful assets for the company. An entrepreneur must be very critical about who joins his/her company and who can be an efficient resource to build a talent pool for the business. Relevant skill-set, competency, and knowledge base must be the primary criteria, and not his/her personal relations with a candidate, for the entrepreneur to build a successful business.
2. Not Having a Plan B
It is extremely important for an entrepreneur to take into consideration the risks and challenges while running a business. Not having dynamic strategies or a perfectionist approach towards the Plan A can easily ruin a business. A perfect plan can mess up easily during its execution if risks are not considered. Thereby, entrepreneurs must have a Plan B that will save funds and protect investments, and ultimately avoid huge losses.
3. Not Investing in Finance Experts and Resources
Accounts and finance is one of the most important departments for any start-up. Most entrepreneur fail to give finance as much importance as it needs, as the focus is more on the product, sales, and marketing, in most cases. Entrepreneurs must not hesitate while hiring finance professionals, who can offer their best advice that can save the company in crisis. Lack of expertise in finance can cost a fortune to a new start-up, thereby, entrepreneurs must get finance experts on board.
4. Not Being Able to Map the Market Gap
The idea of starting a new business basically revolves around its prospect customer’s needs and meeting them with enough supply of relevant products. While an entrepreneur steps in a new industry with a start-up, identifying that gap between supply and demand becomes highly crucial. If a business owner fails to notice that gap and take action on the right time, it directly translated into the loss of golden opportunities.
5. Acting the Only Source of Knowledge that the Company Has
There is nothing worse for a company than a boss that acts like he/she knows it all. An entrepreneur who is not open to new ideas and learn new practices to learn a business can be one of the major reasons why a start-up failed. An entrepreneur must focus on evolving dynamically in a market by making the best out of every source of knowledge he/she can have on board.
6. Not Paying Enough Attention to Social Media
Social media and platforms like Facebook, YouTube, and Instagram have gained more importance than ever before. Expecting consumers to spot you without any social media marketing in today’s world can be easily consider foolish. Not using social media as a marketing tool may not ruin a business but it may certainly limit the company’s growth. With social media becoming a huge past of people’s lives, an entrepreneur must leverage this trend to either promote products or create a brand identity, or both.
7. Volatile Business Strategies
Starting a new business or a start-up is not a smooth ride. It is bound to create moments of distress and may make the leader doubt the propriety of salient business strategies. But changing the main approach or principle of the business in the challenging times can do more harm than help. It only creates confusion and anarchy, in worst case scenarios. As an entrepreneur, it is necessary to have a steady hand in difficult times. Making decisions rationally and having done complete homework before jumping into a business will only help with hard knocks.