From time immemorial, people have been talking about how failures are the stepping-stones for success. In order to make this statement true, the first step is to realize what went wrong. Most of the time, young entrepreneurs fall into the never-ending loop of ‘blunder to calamity’. The inability of entrepreneurs to identify their mistakes toggles them from one mistake to another which ends up being fatal to their businesses.
There is no golden rule for success but entrepreneurs must be able to identify the blunders they are committing so that their errors do not tamper with their success. Entrepreneurs should never forget that failing to plan is planning to fail.
It is good to have a head start to put a check on blunders committed. The points below are some of the nuances that should not be overlooked by young entrepreneurs :
1. Absence of proper vision:
The absence of a well-structured vision is like playing football without goalposts. All the hard work of winning the ball and having good possession is taken for a toss when there is no goal to score. Similarly not having a vision will lead to an effort-drain as there will be no checklist to identify whether the business is heading on the right path or not. When vision is well structured, it is easy to bounce back during setbacks. Only clarity on where the business must be taken can provide appropriate insights on finding the right solution.
2. Failure to understand the market:
Even thorough market research cannot fill certain voids. Young entrepreneurs usually lack practical exposure needed to be successful in the market. To take the business in the right direction, knowledge about the market should be at its epitome. The development of such insights about the market is only possible with a decent experience associated with that market. Hence, the best solution to eliminate this problem is having a mentor who can advise in taking the right decisions. Failure to understand the markets always keeps the business in a reactive mode. Due to this, decisions are taken to mitigate the problems that occur. Only a good market research can allow the entrepreneurs to foresee the changes and take measures proactively. Being reactive is never a solution. It is not a sustainable way to do things.
3. Financial Blunders:
Financial blunders lead to long-term consequences. At the offset, most young businesspersons end up having no money to invest in their businesses. Hence, a proper capital structure consisting of an appropriate mix of retained capital, debt financing and equity financing is essential to maximize the firm’s value. Many young entrepreneurs do not understand how to maximize returns on investment. People should not hanker after branding and spending hoards of money without developing the requisite competence. When such a situation arises, the firm ends up being an average player in the market failing to deliver up to the expectations. Financial decisions are often paradoxical. The previous point talks about not spending unnecessarily but at times small business owners make the mistake of being too frugal. Investments must be made to simplify business processes and money should be spent if and when necessary.
4. Resistance to change:
Changes in trends and processes are inevitable. Hence, it is the duty of the entrepreneurs to embrace changes and harness the new to transcend to greater heights. Resistance to change is in short, the inability to capitalize on an opportunity to grow. Changes can come in many forms and technological changes are the most predominant. Young businesspersons should understand that changes happen for the good and they must embrace them to reach newer heights. No matter in what form the change may come, if it is a catalyst for developing the business, it should be incorporated.
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5. People first and product next:
New-age entrepreneurs fail to understand that it is always people first. Many of them make the mistake of thinking that a good product is enough to get a large customer base. Customer-first mentality is essential to mold the products and services in accordance with the needs of the customers and only when they are satisfied, they will be loyal. A good product is definitely necessary but not sufficient. The key for people to use a product is the awareness about the product. People must be aware about how the product can solve their problem and that is when they will spend on it.
These are the main mistakes that can hinder any business’ progress, when a similar situation is encountered again, entrepreneurs please watch out.