Starting a business is one of the most challenging tasks for a young entrepreneur, full of ups and downs. Reports from the U.S Bureau of Labour Statistics show that over 20% of new businesses fail within the first two years of operation, and approximately 50% of companies do not survive the first five years of operation. In addition, most young entrepreneurs have little or no experience in the industry they are venturing into and lack proper guidance, often leading to the failure of their businesses. Therefore, it is vital to escape the hardships of being a young entrepreneur.
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Ten (10) Common Mistakes Young Entrepreneurs Make
Failure to prepare or neglecting already designed business plans
One common mistake young entrepreneurs make is failing to prepare a business plan; even some entrepreneurs who prepare one do not follow it in operating their own business. People often say when you fail to plan, you are already planning to fail. A good business plan must include where funding for the business will be obtained and how this money will be spent. Having a business plan helps you avoid misuse of funds; it helps speed up events and increase business efficiency. Also, a young entrepreneur with a business plan will get more investors, which means it will be easier to raise funds. Finally, it will be advantageous if you work in the industry for a short time to learn the business properly before starting a shop.
Lack of passion
Another common mistake young Entrepreneurs make is they go into a line of business because they feel they will make plenty of money. Passion represents a very significant consideration when choosing a line of business. Passion represents a major driving force in business; it helps provide the will to keep going even when the business is going through a crisis. Most entrepreneurs only research businesses where they can make the most returns and dive into those businesses without looking at the risks. It, therefore, becomes challenging for them to overcome challenges faced in business. Hardships and failures of being a young Entrepreneur may cause the entrepreneur to give up the business venture at first sight of problems because of lack of passion.
Lack of sufficient marketing
Hardships of being a young entrepreneur often make most entrepreneurs who launch businesses forget to market their business. Some entrepreneurs believe that once you build good business, people will always come and would rather believe in free PR and word of mouth. A young business needs to invest heavily in marketing its product. The budget must always be allocated to marketing your product. With the introduction of social media, marketing costs have fallen in recent years, and entrepreneurs can now leverage various social media platforms to sell their products correctly.
Lack of adequate financial preparation and resources
One common mistake young entrepreneurs make is neglecting financial planning and underestimating how much capital would be needed to build the business and keep it running. It leads to poor financing of goals, and businesses may crash at first sight of trouble. These hardships of being a young Entrepreneur can be avoided by preparing financial projections for your business which will help you secure financing and investments.
Avoiding outside help
Young entrepreneurs’ mistakes and failures often make them reluctant to admit the need for help. It is common for young entrepreneurs to feel they can do the Job alone and do not need any help since they know their product in and out. Young entrepreneurs must avoid getting a mentor or hiring an outside consultant. They should also create an advisory board that can provide support and ideas.
Setting unattainable goals
Another common mistake young entrepreneurs make is setting huge ideas with no workable plan to achieve them. You must set realistic and easy-to-achieve goals for big ideas to be realised. Young entrepreneurs’ mistakes and failures often come from setting unattainable goals. They must therefore make specific short- and long-term goals. An entrepreneur should not just plan to produce 100 million naira in one year; he must set a reasonable goal while providing specific steps to achieve those goals.
Read also: THE 5 DON’T FOR NIGERIAN BUSINESS MEN
Putting your product first and people last
Creating a business model that puts the customer first is essential in starting a business and building a product. Unfortunately, a common mistake young entrepreneurs make is that they are primarily concerned with making money, forgetting that the primary key to building a good business is having a loyal and satisfied customer base.
Making hiring decisions based on cost
Another common mistake young entrepreneurs make is in putting together their team. In most businesses, funds are usually tight, and it is tough to hire experienced hands. Low-cost employees are often unskilled, inexperienced, and unreliable. Therefore, it is crucial to hire a skilled hand to help you achieve your goals. The problem with failure to hire capable hands is you end up paying in the long run.
Failure to use technology
Young Entrepreneurs’ mistakes and failures can also be traced back to the inability to use technology appropriately. Technology today can significantly improve the productivity of your business. It is important to consider how technology can help you run your business more effectively, increasing growth and efficiency.
Setting a wrong price due to failure to study the competition
It is vital to research the competition product in developing a product. Every product must improve what is already available in the market to help grow your customer base. Therefore, research must be done extensively before deciding on the cost to be allocated to your product. You must also observe the changing price of goods needed in producing your product and make adequate adjustments.
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In conclusion, being an entrepreneur is hard, and it is very common to make mistakes as it is part of the growing process. This is why it is important to know common mistakes young entrepreneurs make as they grow their businesses. As you encounter any challenge, you must investigate the cause and find a solution.
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