Entrepreneurs form over 50 percent of the working population which makes them a vital part of the economy in general. Millions of new jobs are created through entrepreneurs and startups which put money back into the community. Many entrepreneurs often face challenges in the first year of starting a new business, with cash flow problems that they find difficult to rectify in order to save their business or unfocused offerings that do more to damage a reputation than help it grow. Such mistakes can cost a business owner their livelihood and sometimes lead to permanently shutting down their business when such problems become too vast to manage.
To help prevent making the biggest mistakes in business, here are 5 things every new entrepreneur should avoid:
- Not asking for help: A common mistake is not asking for help when you need it. There is no business or entrepreneur that will not need some form of assistance at any point in time for running any kind of business. Being an entrepreneur does not mean that one must run or handle a business alone. One can not be everywhere at the same time and do everything, it is important to source out the right team and seek the right help for your business to grow.
- Overuse of personal capital: Not having a limit on the amount of personal capital one is willing to use can cause a bottomless pit of drained funds. This can lead to one using up all funds meant for daily living to fund a business without managing profit gained or loss incurred. There should be a limit to the use of personal funds every new entrepreneur must have in order to prevent total bankruptcy. When such a limit has been reached, one should try and raise capital outside any personal means to support the growth of a business.
- Losing focus: It is easy for an entrepreneur to get distracted especially when doing different things. Keeping tabs on limited resources and focusing those well is so incredibly important. One should never lose focus from the initial goal and purpose for starting a business.
- Treating your business as a hobby: One of the biggest mistakes entrepreneurs make is subsequently treating a business which was inspired by a hobby as a hobby. It is great to be able to turn a hobby into a business, some of the most successful businesses were first started as hobbies. However, when such hobby has turned to a vital source of your livelihood, it is no longer just a hobby and should not be treated as just that. It is important to maintain the passion in doing a business but it is also important to never lose the seriousness of the business. Consistency in business is key.
- Accepting every opportunity: Quality is always better than quantity. It is not just about how much but also how well. Accepting every opportunity that looks promising in the first instance without evaluating their long-term value may just lead to many dead ends.
Olatorera Consultancy Limited provides business development services to high net-worth individuals and companies looking to grow, enter or do business in Africa.