1. Starting With The Wrong Intentions
The prime example here is starting a business solely to make money quickly. This will lead to short-term thinking, and unsustainable practices, and ironically it will make it very difficult to make any money.
If your business idea does not align with your personal goals and values, you will drastically harm your chances of success.
Reflect on whether this business stacks up against with your long-term goals and passions. Does your business idea excite you? Are you passionate about solving a real problem? Do you want to make a difference?
Read "Start with Why" by Simon Sinek to understand the importance of having a clear vision and purpose behind your business.
2. Neglecting Market Research
Without a deep understanding of the market your business operates in and the needs of your target audience, you cannot create products or services that will be of value. Leaving this out will result in wasted effort and missed opportunities.
Your market research should be the foundation that your business plan, proposition, messaging, and marketing strategy all rely on. Conduct thorough market research to understand your target audience’s demographics, psychographics, and pain points to enable a clear line of sight in your action plan.
3. Not Writing A Business Plan
If you fail to plan, then you plan to fail. A business without a clear strategy and plan lacks direction and focus, making it impossible to make informed decisions and ensure progress.
You need to create a detailed business plan outlining your goals, strategies, and target market. Starting a business is hard enough, without a plan it’s impossible. Your business plan should be your guiding force as you develop and grow your business.
Business strategy and planning is an art form in itself, and it’s a step that many entrepreneurs fail at, that’s why we made it one of our primary services at Founderli.
4. Lacking A Unique Value Proposition (UVP)
Failing to differentiate your product or service from competitors will make it difficult to attract and retain customers. This is because there will be nothing different about you, and so why would a customer choose you over an established player?
It can also inadvertently cause poor business practices, like competing in a race to the bottom — more on this in the next section. Having a UVP instead gives you the opportunity to carve out your space in the marketplace and create your own micro-monopoly.
Your need to clearly define and communicate what makes your business unique and why customers should choose you. This will give you an edge because instead of analysing your competitors, your competitors will be analysing you. Read “Blue Ocean Strategy” by W. Chan Kim and Renée Mauborgne to learn how to create uncontested market space and avoid price wars.
5. Engaging In A Race To The Bottom
This is where businesses compete solely on price. It’s a zero-sum game, and as the title suggests — it’s a race to the bottom! Even if you win, you’re at the bottom.
If your business is even able to compete on price then you need to re-evaluate your proposition, as to compete solely on price means, to the consumer, there is no other value to your service other than its economic cost. This means that your proposition is not differentiated enough from your competitor in the race to the bottom.
Instead, create a unique service that cannot be judged solely on price. Let your competitors compete on price and be the winner at the bottom.
6. Unknowingly Creating A J-Curve Business
A J-Curve business is one that will experience a drop before growth, and thus, the revenue graph is shaped like a J.
The problem with these businesses is that they require careful planning to avoid cash flow problems and likely require high amounts of investment, a key example — software businesses.
There is nothing inherently wrong with J-Curve businesses, the problem is when new entrepreneurs don’t realise that they are starting one. Then, before they know it, they’ve spent all of their money on a business that is nowhere near finished and have to close the business.
90% of businesses fail in the long run, it’s much easier and safer to start a business that doesn’t require large investments and can start generating revenue quickly. “Business Model Generation” by Alexander Osterwalder and Yves Pigneur provides a practical guide for developing a robust business model.
7. Focusing Too Much On Development
Many businesses focus too much on product development and neglect their marketing and distribution channels, leading to insufficient customer acquisition. Unfortunately, most entrepreneurs believe that if you build an amazing product, then it will spread like wildfire — “build it on they will come”. But it’s simply not true.
Most businesses die not from a lack of a great product, but from a lack of ability to attract customers.
What businesses need to be doing is developing their product in real-time in a live marketplace with real customers, as a bonus this also makes it much easier to develop a killer product, quicker.
Develop a comprehensive marketing and growth plan to attract and retain customers while building and iterating your product/service. “Traction” by Gabriel Weinberg and Justin Mares offers actionable strategies for gaining customer traction and scaling your business.
8. Lacking Focus And Concentration
So many entrepreneurs are guilty of this — we are visionaries, and we are always thinking of the next big thing. It can be really difficult to concrete our focus and attention into one business.
But in order to succeed, you simply have to be all in. It’s just too difficult otherwise. Trying to juggle too many tasks and goals simultaneously will dilute your efforts and reduce your overall effectiveness and results.
Inch wide & a mile deep or a mile wide & an inch deep? The real value is in the mile deep.
Prioritise your tasks and focus on high-impact activities that will drive business growth and development. Use time management techniques and consider delegating or outsourcing tasks. “Essentialism: The Disciplined Pursuit of Less” by Greg McKeown provides valuable advice on maintaining focus and avoiding distractions.
9. Skipping The Minimum Viable Product (MVP)
Spending too much time and resources on developing a perfect product without validating your idea is most likely going to lead to failure. Your goal should be to confirm if there is market demand as soon as possible, because if there isn’t then you need to be pivoting as soon as possible.
Without seeking market validation on your product you are likely to build something that no one wants, or you will make costly assumptions over what is and isn’t valuable in the eyes of the customer.
Working with customers to build your product enables you to adapt to changing market conditions, capitalise on unspotted opportunities, and build something people actually want to pay for.
Stay flexible and be willing to pivot your business model or strategies as needed. Build a Minimum Viable Product (MVP) to test your concept with real customers, gather feedback, iterate, and repeat. “The Lean Startup” by Eric Ries emphasizes the importance of MVPs and iterative development.
10. Giving Up
The game of entrepreneurship is not easy. But you cannot allow yourself to give up after failure, or worse yet before you’ve started! Embrace failure as a learning opportunity and stay persistent.
Understand that setbacks are part of the entrepreneurial journey. The data is clear, 90% of businesses fail in the long run, this means that you should expect to go through 9 failed businesses before achieving success — don’t quit.
Starting a business is hard enough by itself, and sadly the odds of success are not in your favour. By avoiding these common mistakes, you will increase your chances of building a successful, sustainable and enduring business.
Remember, entrepreneurship is a long journey filled with learning and growth. Stay committed to your vision, be adaptable, be tough, and continuously seek improvement.
Kieran
Founderli CEO, Founder.
