Start-Up Right: Learn From Common Mistakes Entrepreneurs Make
Entrepreneurs are a rare breed. It takes a lot of courage, ambition and determination to set off on your own and try to make it in the highly competitive world of business. Even rarer still is the entrepreneur who gets it right at the first try. As American-Jazz great Coleman Hawkins once said, “If you’re not making mistakes, you’re not trying hard enough.” But mistakes are costly and can break a start-up company before it’s even fully taken off. According to Deluxe Corp, a marketing company specialised in helping SMEs, 50% – 70% of small businesses fail within the first 18 months — a figure that a maverick self-starter may find hard to accept. TASC Outsourcing itself is an entrepreneurial effort by our CEO, Mahesh Shahdadpuri, who first set up a software company before branching out into staffing and recruitment. Through his example and that of other enterprising souls who have gone ahead of us to build successful, lasting companies, we can get a good idea of what to do and what not to do when starting up a business.
- Build A Strong Foundation For Your Business
Set a clear, attainable goal, and the steps you need to take to get there. It is true that some businesses have succeeded without even having a written business plan, but a clear idea of what you are going to offer to which specific target audience may be the difference between you and a company that folds under within a year. Develop one specific business model and stick to it, at least for as long as it takes for you to get out there and be noticed. Think of it as a launch pad, if you will, to your future as an entrepreneur. The ideation stage is quite exciting, and coming up with twenty ideas in one sitting can be a heady experience. But what good will it do you to have 10 businesses with none of them actually bringing in a profit?
- Keep Your Focus
Focus on one thing, one product or service, one that you are passionate about and believe you can do better than anyone else and get the ball rolling. Always remember, getting started is one thing, seeing it through to success is another. You will meet challenges along the way, find the returns to be not as good as you had forecasted or that being an entrepreneur means more hard work than you first thought. Sadly, there are no shortcuts in business. You need to see it through every step of the growth process before you can make informed decisions on whether you want to continue on your chosen model or not. All you can do is manage your expectations and know that it takes at least six months to a year before you can see actual results (or a lack thereof).
- Plan Ahead
Finding out your product or service will not sell once you’re already six months into operations can be devastating, even more so because it is highly avoidable if you do a few steps in planning before launch. Do your research. Learn what the competition is doing. Listen to what your target audience has to say. Conducting even a brief, informal feasibility study before launching your company can save you much time and money in the long run. It might even help you refine your offering even further and ensure its success.
- Delegation is Key
For entrepreneurs, it’s quite easy to fall into the trap of thinking you know it all and can do it all. While you don’t necessarily need a partner to start a business, it doesn’t have to be a one-man show either. Plot out everything you need to do, figure out in which areas you will need help, and then think of the specific kind of help you need. Create a job description and hire people according to your needs. But don’t get stuck on résumés either. Remember that motivated people who are willing to learn from and grow with you with a can-do attitude may be a better fit for a start-up than those who’ve acquired all their skills working in your chosen industry for decades.
- Managing The Money
We’ve also heard many stories of start-ups running out of money midway through incubation. Listing all your costs on the outset, both fixed and potential ones, gives you an idea of how much money you need to bring in on a daily basis to keep your doors open. This will also help you make informed decisions regarding your pricing. Will your operation costs remain the same in the next few months? Do you expect to need more equipment and staff within a year? Covering these and other variable expenses in your pricing now can prevent getting negative feedback from customers surprised by a sudden surge in your prices later on. Even more important, perhaps, is deciding how much you are going to pay yourself and factoring this into your calculations. Many entrepreneurs believe in paying themselves with whatever is left in the coffers at the end of the month or wait until the company turns a profit. While noble, this practice is impractical. If you include your “salary” in the operating costs from the start, you will avoid having to dig into your personal savings should the need arise.
- Remember What Is Important
Money matters, but it is not everything, especially not for start-ups. If you keep your focus only on profit and growth, many things fall to wayside, starting with your values. Many entrepreneurs have given in to the temptation by doing quick turnarounds that compromise the quality of their products, resulting in negative customer feedback and ultimately losing the business. Set your own standards and stand by them no matter what. Spend on quality and you get quality. This is true for both raw materials and staff. After all, people know what they are worth and whether they can demand a premium for what they are offering or not. While the most expensive is not necessarily the best at all times, it is your responsibility to spend your start-up money wisely, so think long and hard about what you spend it on.
- Get The Right Marketing Mix
Another common entrepreneurial mistake when it comes to money is not spending on marketing. True, with communication technology what it is now, word of mouth advertising is even more widely and quickly spread than ever. But relying on it completely for your target audience to find you can be risky. Choosing the right platform to advertise your product and creating a smart media plan within your budget can help you get the word out without breaking the bank. Go online and you will find hundreds of “motivational” stories about starting a business, alongside which will be thousands of examples of failure that will make you want to just give up even before you’ve begun. Entrepreneurship is perhaps one of the most daunting challenges you will take on, but it is also at the top of life’s list of most satisfying experiences. Plan ahead, develop the skills that will enable you to face challenges as they come but have the flexibility to handle surprises along the way. And when the going gets tough, remember these wise words from T.S. Elliot, “If you aren’t in over your head, how do you know how tall you are?”