One of the items on your bucket list is to be your own boss. You feel that the best time to start your business is now because you are still young. Well, that is a sound decision, and one worthy of praise.
But wait, don’t quit that income-generating job just yet. There is a lot more to starting a business than a few good ideas of what you would like to go into.
Do you know that as of 2019, up to 90% of startups failed? The trend is that 21.5% will close shop within the first year. In the second, 30% will follow suit. By the fifth and 10th years, 50% and 70% will no longer exist.
There are various reasons for failure. These include lack of money, wrong positioning, and ineffective marketing.
You can avoid being part of the statistics by avoiding some common mistakes young entrepreneurs tend to make. In this article, we will show 4 different mistakes that are common for young entrepreneurs.
We spoke to a startup marketing agency about mistakes young entrepreneurs make. Their knowledge comes from extensive interactions with new business owners seeking marketing and branding services.
According to the agency, a top challenge for most entrepreneurs is not having a business plan. Young people are, by their very nature, quite impatient. For them, starting a business is about having an idea, capital and they are good to go.
But, without a roadmap, the chances of success are slim to none. Do take time to put to paper everything to do with your business.
The business plan should highlight:-
There are tons of resources available online that can guide you on how to come up with a solid business plan. But, do seek professional help for some of the areas. Talk to financial advisers and legal experts to ensure you comply with regulatory issues.
Simplistic thinking is that a business equals the right product or service and sells it to customers. But, the truth is a lot goes on in the background. So much that it can quickly get overwhelming for a young entrepreneur.
The startup marketing agency echoes the same sentiments. It takes time, effort, heavy lifting, and lots of work to set up a company. Understand the different elements that come together to create the whole picture.
And, understanding is just the first part. The second is getting the different elements to work together in perfect synchronization. It is a good idea to enroll in business classes. Get a mentor or seek advice from those who have found success in entrepreneurship.
Truth is running a business is like being in a never-ending learning institution. Yes, you will be a student for life, because the business environment is always changing. So how can you keep up if you don’t take the time to educate yourself?
The business is taking off well. It seems like you did have a good business idea. Work is starting to pile up and you need to beef up your team a bit more. Requests for work from family and friends have been coming in.
And so, due to loyalty, you are thinking about hiring those within your close circles. Pump those brakes for a minute, please.
There are so many reasons why you should never take that route. These include:
Are we saying that there are no exceptions to the rule? The answer is no. But, if you must, base the hiring on merit. It should be about qualifications rather than friendship.
Lastly, establish boundaries or rules that govern the working relationship. Is it easy? The answer is NO, but it is achievable.
Things are going well in your new business, and the money is starting to come in. It is quite exciting because life is taking a turn for the better.
And, what better way to celebrate it than to enjoy your hard work. You start to sleep in a little bit later or do not work at all, depending on your mood. After all, why do you need to check in at 8 a.m. with your employees if they work for you?
The out-of-town holiday trips become more frequent. Your family and friends marvel at your generosity since you are the one who pays all the bills during outings. And, let’s not forget the swanky new car you gifted yourself recently.
Do you know what is happening to you? Well, the industry refers to it as lifestyle inflation. The more you make or earn, the more you spend.
With lifestyle inflation, it becomes difficult to save. You get into debt trying to maintain the new lifestyle. Dipping into the company accounts for personal use will become a foregone conclusion.
Maintaining focus and discipline is not negotiable. It is also critical that you set a good example for your team. Delegate tasks accordingly with the confidence that you have the right people working for you.
But, the buck stops with you. When the business fails, you will bear the burden, not your employees.
Going into entrepreneurship can be very rewarding. But before you find success, there is a lot of hard work that goes into setting up the business. Start with a business plan. That is the road map that will guide all your activities.
Take the time to educate yourself on how to run a business. If you do not have the background, do enroll in classes.
Avoid mixing business and personal relationships. And finally, maintain focus and discipline when running the business.
We have only looked at four mistakes that you should avoid as a young entrepreneur. Take our suggestion of educating yourself by exploring more resources on this topic.
Good luck to you!