Being an entrepreneur in today’s challenging economy (to say the least) is no easy feat, especially for the ones who want to start fresh and don’t know much about what they are getting themselves into. Without intending to demoralize anyone, we have to mention that many new ventures faced failure because a whole range of reasons which have a lot to do with the ever – changing and unpredictable landscape of our national (and even global) economy and, no matter how harsh this sounds, with the entrepreneur’s inability to see the big picture and build a back-up plan to overcome all possible obstacles. Specialists fill in countless numbers of online and written pages with countless of advice focused on new entrepreneurs, highlighting the fact that a good idea doesn’t always translate into a good, profitable business. So today we will see some entrepreneurial mistakes that can cost you the business, even if you’re planning to open a restaurant in your neighborhood or build an online store with hand – made products, the principles are the same.
You don’t assess well the business plan
Many new entrepreneurs have a good idea, sometimes original, many times put in practice already and viable (in the case of others) and start building a business plan around that idea. Opening a cafe or a restaurant in an area where there are few or none looks like a brilliant idea, one that cannot miss. But a business plan, as you already know, means assessing all variables, obvious and hidden, making extensive and complex calculations, financial projections, risk – assessment, positive and negative projections and so on. Doing a business plan on a model is one thing, testing your business model is another one. You can hire a specialist to analyze your business plan or evaluate it with SCORE or other tools available for small enterprises to see where you might get wrong and where your projections don’t match the reality.
You don’t save enough money for back – up
This is a common mistake many people do: they invest everything they have in a business or worse, they get themselves into serious debts that have to be paid at some point, while the business is still growing and not making a profit. Before starting anything, make sure that you have financial reserves to sustain the business at least for two years, until it becomes profitable. Many entrepreneurs fail because they invest and invest and get stuck because the lack of money to roll. Perhaps the business model you rely on shows you are going to make a profit in the next three months, but being prepared for the unpredictable is just good strategy. Entrepreneurial mistakes that can cost you time, money and even your health consist in not having a back – up plan even when everything looks perfect on paper.
You are not committed to your business 110%
If you believe that a start-up or a growing enterprise is something you can get yourself involved into a few hours a day, you start on a wrong path. Having your own business sounds great in movies, where the main character has a full time job and manages to become a millionaire working from time to time for his own venture. Reality is that you will have to dedicate your business your entire time and efforts, and then some. Successful ventures need dedication, no matter if you have to spend all your days and nights in your restaurant or every given weekend for creating hand – made jewelry. If your personal life style doesn’t comply with the true requirements of managing your own business, the people you hired, the money you’re rolling and the time needed to strengthen your position on the market of choice, maybe you need to re-evaluate your future as a successful entrepreneur.
Before jumping at the opportunity of making money fast and easy, look around you, identify the successful businesses that seem to be solid and profitable and ask advice from people who are already playing this game with ease. Of course, one business model doesn’t resemble another and copying exactly a plan might be a very wrong idea, but asking for advice and learning from others’ mistakes is a good start to avoid the most common entrepreneurial mistakes that make the difference between a successful venture and a money pit.