Young entrepreneurs are full of spirit and zeal; they are upbeat about their new project and do everything in their might to make things go their way. However, the fact is that this zeal and enthusiasm alone are insufficient for business. The natural inexperience and lack of guidance often results in common mistakes young entrepreneurs make.
Awareness about one’s strengths and weaknesses always helps in coming up with innovative problem solving techniques and also benefits the business. This article deals with the common mistakes made by young entrepreneurs, why these mistakes occur and how to avoid them.
What are the common mistakes young entrepreneurs make?
Young entrepreneurs are inexperienced; but this doesn’t mean that they are unskilled or unprepared for business, just that they are not seasoned enough to deal with the vagaries of the business world. Young entrepreneurs are innovative however for certain market situations experience is more important than innovation. Here are a few common mistakes committed by most young entrepreneurs in matters of business:
• Failure to plan and visualize – if an entrepreneur is not sure about the implications of his/her business there is a good chance that the business is bound to fail. It is important to plan everything to the minutest detail and stick to the plan. Here are a few important factors that an entrepreneur must plan for:
-The short term and long term goals of the venture
-Who the target consumers are
-A clear organizational structure (if the business involves more than just the entrepreneur)
-Draft an executive summary that contains details about who is doing what in the company, a finance plan and a marketing plan
• Taking financial planning for granted – one of the most devastating mistakes for a new entrepreneur is not having the finances in place. Unless all factors of business are accounted for and budgeted for a business cannot succeed. Everything from loans to payment for overheads, from salaries to infrastructural investments must be taken into account and planned for
• Problem of focus – Young entrepreneurs are not inhibited by risks, however taking risks without a focus is what lands them in trouble most of the time. An entrepreneur must get the focus right and concentrate only on those activities that would lead one to the set business goal. They also tend to shift focus towards new businesses in case the initial plans don’t take shape fast. One has to wait for a minimum of 6 months to a year for a business to get a firm ground, a shift of focus at this point can prove lethal
• Not paying heed to the market – the market is often the best judge of how a business should mould itself; listening to the market is an important trait for an entrepreneur. When entrepreneurs fail to listen to the market and pay heed to the trends in the market, they naturally make a big mistake. The business suffers if the businessman has an imperial attitude. Thus a willingness to adapt the business to the needs of the market is critical to success
• Narrow vision – Young entrepreneurs are lured by temporary and short term profits and this greed results in their vision being clouded. It is critical for an entrepreneur to work in line with future predictions and a long term vision for the growth of the business rather than just settle for temporary profits then close business and move on to another one. Shifting focus kills the industry.
• Too many partners – it is but natural that young people want to start a venture with friends or family members; but too many people at the decision making level pave way for delays and this in turn leads to a drop in efficiency. In fact experts are of the opinion that it is better to start smaller ventures alone or with members that can be recruited from outside one’s circle after a through background check.
• Spending too much time on planning – while planning is absolutely necessary entrepreneurs must move on. Unless a business plan takes off it remains just a document. One must spend equal time to both – planning and marketing of the product.
• Working without enough financial back up – Most young entrepreneurs wonder how they can do away with spending on various heads. It is true that there are certain things that can be got for free, but unless one has sufficient financial back up the business is headed for a doom. Maintaining a separate contingency account is as important as applying for finance for a start up
• Establishing a business that is too rigid or too fluid – a business must be neither too rigid nor too flexible. An entrepreneur has to understand that certain aspects of business such as finance and model plans are best left by the book and some others such as marketing and product development are better of when they are creative and dynamic
All the above are common mistakes young entrepreneurs commit. Thankfully the beauty of business is that there is a way out of every mistake and one can constantly learn from every failure.
How one can avoid the mistakes young entrepreneurs make
There are three ways to avoid these mistakes (apart from not committing them!) One needs to constantly remind oneself of these three things to prevent unpleasant failures in business. The aspects that are:
1. A passion for the business
2. A keen eye on the market
3. A willingness to do away with defunct practices
These three aspects will serve as fuel to an entrepreneur’s enthusiasm and constantly remind the entrepreneur about the need to keep the business updated. Mistakes are definitely stepping stones to success, but too many stones will tire the entrepreneur out and the business is bound to suffer. An entrepreneur should take care to avoid old mistakes and be wary of committing new ones nevertheless be prepared to learn from them and grow.