10 Common Pitfalls Entrepreneurs Should Watch Out For
It’s often said that you don’t know what you don’t know. As an aspiring entrepreneur, there will be many aspects of your journey that may catch you off guard or downright confuse you. While this is normal, some areas of ignorance can impact your chances of success.
To help you avoid some of the most common mistakes, we asked 15 experts of Forbes Coaches Council to share some areas where they frequently see new business owners stumble. With their insights, you may be able to navigate around some of the entrepreneurial pitfalls you’re likely to encounter.
1. Losing Sight Of The Big Picture
In startup mode, many owners wear 10 hats and fill many roles. Working in the business is often essential to getting it off the ground. It seems unrealistic to have time to do big-picture reflection or planning. The problem is if you don’t stay in sync with where you’re headed, you lose sight of the target, go in circles and get off track. Ensure 10% of your time is in the helicopter.
2. Not Articulating What Truly Differentiates You
Let’s be real, there are thousands of business owners in almost every industry. While you likely think you are unique, in reality, you may be invisible in the vast noise of similar vendors fighting for their attention. Spend time to establish a Unique Differentiation Proposition (UDP), that will separate you from the masses and solidify distinctiveness in the minds of your target audience.
3. Not Interacting With Other Entrepreneurs
The internet is replete with information, and social media makes it easier to ask and receive advice and tips. However, there is no substitution for offline transparent conversations with other entrepreneurs and owners. Interaction makes it easier to trigger questions, dive deeper into the answers and share experiences. It’s easy to jump in without building a circle of honest and trusted advisors.
4. Failing To Set ’80/20′ Parameters
The Pareto principle states that 20% of what we do will create an 80% impact. A new business owner and entrepreneur needs to remember this principle and concentrate on what that 20% is for their business. This means, “less is more!” For many new business owners and entrepreneurs, this is a hard principle to grasp. To get clear, do a competition study and talk to your customers.
5. Neglecting Self-Reflection
Entrepreneurs neglect the self-reflection needed to understand how they need to change in order to leverage their success. Have an outside thinking partner give you candid feedback and insights about what you can do differently to get better results. Don’t forget to look in the mirror to see and seize the opportunities within you and dig deep with a good coach to overcome weaknesses.
6. Thinking You Should Have All The Answers
One common pitfall is a desire to become the “expert” instead of remaining the “learner.” It’s true that we don’t know what we don’t know. My advice is to keep it that way. Stay curious. Don’t feel compelled to have all of the answers. Instead, surround yourself with people who challenge your assumptions and expand your thinking, supporting you to raise your own game.
7. Being Averse To Sales
I run into many entrepreneurs that hate to sell. Unfortunately, entrepreneurs who don’t sell don’t often last. If this is you, change your mindset. Think of the process as solving a problem, not as selling. This simple mindset shift will not only help you get comfortable, but it will also help you be more effective. After all, solving problems is the reason most of us go into business.
8. Trying To Go It Alone
Often, the new business owner or entrepreneur goes out to strike their own success, to do it on their own and to create the future they always dreamed of. Then, they get hit on all sides and get stuck. People are not designed to do things by themselves, not even the “solopreneur.” You need a coach, a mentor, a consultant or someone to help you get through. Otherwise, you’ll drown!
9. Letting Ego Get In The Way
Education and collaboration are still some of the best ways of avoiding pitfalls. A serious entrepreneur has to put their ego aside and consider either one in order to decrease the likelihood of “rookie mistakes.” It can come in different forms, such as meeting with peers regularly to discuss business, or having subject matter advisers that augment the entrepreneur’s know-how.
10. Running Out Of Cash On Hand
Running out of cash on hand is a major pitfall for new owners and entrepreneurs. To avoid it, set a budget and follow through on it. No unplanned and unnecessary expenses at the whim, desires and wishes of the owner or entrepreneur. In this difficult market, uncertainties and market demographics changes mean keeping your cash on hand and spending it only on needed expenses and within your allocated budget.
11. Pursuing Too Many Business Opportunities
For every entrepreneur or business owner, every opportunity that comes their way looks interesting and doable. Learn to be clear with what your strengths are and how to leverage those to create success, before jumping into too many business lines or opportunities.
12. Forging Ahead Without A Strategic Plan
If you were going on vacation would you just pack the car, grab the family and start driving? Probably not, as you might end up in some places you might not want to be. Yet this is exactly what many business owners and entrepreneurs do. They start a business without a vision, much less a strategic plan. A strategic plan, with measures, serves as a business owner’s GPS.
13. Ignoring Business Development
One of the most common, and crucial, pitfalls of new business owners and entrepreneurs is their lack of consistency to do business development once they start to grow and get busy. This is something that should be done every day of the year. Work on business development every day so it becomes second nature as your to-do lists and calendars start to fill up.
14. Not Speaking With Customers Regularly
A common pitfall I see for new business owners and entrepreneurs is that they seemingly go into their “cave” when building a new product or service with the idea to pitch it to customers once it is ready. My advice: Don’t create in a vacuum. Actively engage your potential customers during the build stage and understand their needs, wants and pain points upfront.
15. Resting On Early Wins
It’s thrilling when you close your first few deals, but don’t rest on your laurels. Focus on creating a sustainable business and always act like it’s your first day. Continue to build new relationships and feed the ones you have, get ongoing client feedback for continuous improvement and innovation and learn new ways to deepen your craft. Successful entrepreneurs don’t take early success for granted.