The 7 Top Business Mistakes Entrepreneurs Make
The Business Mistakes Entrepreneurs Make - Top 7
Owning a business can be a challenging undertaking that demands careful planning and preparation. This article highlights the top 7 business mistakes entrepreneurs make and should try to avoid.
Business mistakes or learning experiences?
Setting up a business always involves risk, however, detrimental mistakes result from unconsidered risks and can be avoided with the right planning and learning from the mistakes of others. Without further ado, here are the top 7 business mistakes entrepreneurs make.
1) Making decisions impulsively as opposed to relying on sound logic and research
Frequently, business owners invest large amounts of funds into a new venture without prior validation or proper research. It is very rare that such businesses will succeed, develop, and scale up. Conducting proper research and proper business planning is always the key to success in the business world. This includes sound financial forecasting and a clear understanding of the target market and competition. These two factors are the backbone to any good business strategy.
2) Investing money in operations that don’t really have a return on investment in the short term
Not every investment in a business needs to contribute to a profit bottom line. But if a new business is low on funds, it would be extremely wise for it to invest these funds into areas that actually generate profit. It makes more sense for a new cattle ranch to invest in more cattle than to refurbish the farmhouse so that potential buyers have a pleasing porch to observe the cattle from.
3) Handling the whole width of business activities on your own
Of all the possible business mistakes, this one is predominant. Many business owners fall into this category. They attempt to handle sales, marketing, logistics, operations, accounts and HR all on their own. Apart from mentally straining the owner, this will result in the neglect of each functional area. The much-needed flow of constant improvement and development that should be directed towards each functional area is greatly hindered as the owner's efforts are unfocused and scattered. This greatly decelerates growth or stops it altogether. Delegating or even outsourcing some tasks should never be frowned upon. Delegating administration, company secretarial functions, HR and PRO services to a company like PRO Partner Group can help here.
4) Employing an ineffective human resources strategy
For businesses that have/need a substantial workforce, problems can come from the workforce itself, or the management thereof. It is therefore of vital importance for business owners to understand the motivations and drive of their staff. That can only be done by ensuring that honest and transparent communication is the norm. Business owners that can grasp an understanding of what their workforce wants and help guide them towards that usually achieve the most success in getting what they (as an organization) want from their staff. This is known as transformational leadership.
With the rise of the digital economy, some businesses do not own a physical address. But for those that do, choosing a suitable location for their business is beyond important. Many business owners may opt for selecting the closest location to their home or the area with the lowest rents. Although that can be considered not favorable in some industries and contexts, for industries that can handle that type of setup, a comprehensive study can to be carried out to ensure that the opportunity cost (as well as monetary and human resource costs) matches the costs and location.
6) Using only a single channel for marketing
If an auto body shop’s whole advertising budget is invested in radio advertisements, it may be wise for that body shop to revisit it’s marketing strategy. Outdated and unsuitable use of marketing channels is a classic symptom of sole proprietors that do their own marketing. These individuals can be surprised how drastic a difference hiring an experienced marketer can be for their sales and brand. If it is the case that the industry a business operates in can successfully leverage digital media to their advantage, marketing costs can be drastically reduced, whilst increasing marketing impact.
7) Not claiming intellectual property
If the business you run is unique and your offerings are innovative, it would be wise to patent, trademark, or copyright your ideas, brand and service offering. Competitors and copy-cats are quick to adopt new and promising opportunities that they may observe you exploiting. If you don’t protect your intellectual property early on, you may be forced to pay fees to continue using an idea that you pioneered. You may even be barred from doing business altogether because you didn’t protect your intellectual property rights and they have now landed in the hands of your competitor.
Of All the Business Mistakes Mentioned Above, Avoid this One at All Costs
Intellectual property theft is a painful ordeal to go through and it is sadly becoming more common. You can prevent this by trademarking your business and brand or applying for a patent. Reach out to PRO Partner Group and we’ll help you protect your intellectual property. We offer a wide range of company set up, support and PRO services for businesses, and we aim to make your business procedures effortless and seamless. Call +971 (0)4 456 1761 for Dubai enquiries, +971 (0)2 448 5120 for Abu Dhabi, or email us at email@example.com, alternatively please complete the contact form below and we will be delighted to assist you.