Mistakes every Entrepreneur should avoid

Entrepreneurship is a lot about doing experiments and learning from it. But often some mistakes turn out to be too costly. Many times when you realize where you are going wrong, it becomes too late for the corrective actions to undo the negative impacts.

Journey of every entrepreneur is unique and different from others. That’s because everyone starts the journey from a different stage of skill, experience and financial situation. So it is tough to predict who will make or never make big mistakes. But you can always learn about the commonly observed mistakes to stay aware of them. This will significantly reduce your chances of repeating similar mistakes in your venture.

In this post, we shall explore some of the common mistakes Entrepreneurs tend to make while they start their venture.

Startup (Image credits Freepik)

1. Bad Cash Flow Management

Cash flow management is one of the biggest struggles of not only a newbie entrepreneur but also common among established Businesspersons. If you run a business, you need to have required financial processes and controls in place to ensure financial stability of your venture. 

For cash inflow, Ensure to keep a tab on your outstanding payments and credits extended to your customers. Make strict rules and timelines to raise invoices, payment collection deadlines from the date of invoicing, follow ups, etc. 

For cash outflow, remember to spend judiciously and avoid burning a lot of cash before you start earning. As a startup, try to be as lean as possible. This shall also help you adapt to the right amount of financial discipline required to nurture a growing venture.

2. Hiring a Wrong candidate

In a startup, the initial few hires are extremely critical and can make or break a startup. If you are a founder, it would be wise on your part to be in Hiring Interviews till you hire your 100th employee. Hiring a wrong candidate who may not fit your culture and expectations will surely gonna have a long term impact.

3. Over-stretching

Nurturing a startup is not an overnight job and takes a while before your venture starts to take off. Often newbie entrepreneurs get a wrong impression by reading and watching the videos of social media influencer entrepreneurs who tend to glamourize it by showcasing their hypergrowth. This creates a FOMO and you may tend to think of it as a race. 

If you try to beat time by overworking on your startup, you will quickly end up burning out. Remember Life is a marathon, not a sprint. Building a startup takes time. If you try to compare with others and try to beat them, you will never find peace with yourself. 

Instead, be patient and try to work by timeboxing your working hours. This shall leave you with ample time to think creative ideas in the meantime. Remember to enjoy your journey. Your goal should be to compete with yourself and improve yourself every single day. Slowly you will realize you have accomplished a lot over time.

4. Finding Customers for their products instead of finding Products for their Customers

Startups tend to suffer a lot due to wrong Product validation. They tend to make a product first and then they try to find customers who will buy their products. In this case you never know whether there is an ample market for what you are building or not. Also, you never know whether the features and pricing point for your solution is apt for the potential customers whom you are targeting. 

Instead, the right approach should be to find products or solutions for your customers or the market which you are targeting. Always have a target audience and market ready, and then you can try to build a product or solution apt for your audience. This will drastically reduce your probability of failure and you will reach your Product-Market fit early.

5. Pricing too low to attract

In the beginning, when startups are unable to find traction or interest for their products, they tend to slash their prices to increase sales. This is the biggest mistake many entrepreneurs tend to make. 

The reason why your product is not selling in the early stage is because of low awareness about the problem or the solution. But startups tend to think that the problem is the price and they reduce it to gain traction. Sometimes this helps in gaining traction and sometimes even price reduction also does not work until and unless there is product-market fit.

Pricing too low leaves you with a very thin profit margin to invest back in your business. If you are unable to invest back ample cash into the business, you will not be able to grow further. This will negatively impact your financial position in the long run. 

In addition to these, you will also end up creating a customer base who will always seek discounts in your offerings, leaving you with no room to grow.  The right way to price your product is to price based on the value of your offering.

I hope this post will help you avoid making these mistakes in your venture. If you are looking for CRM software to organize your sales better, do check out ToolsonCloud Sales CRM. It’s Free.