As much as we all learn from our own mistakes, sometimes it’s better to learn from the mistakes of others. By so doing, you avoid the agony of having to learn the hard way. This is especially true in the world of business, where a simple mistake could spell doom to a venture you worked so hard to see up and running.
In other words, a business can stumble and fall from a simple bad decision, a miscalculated risk, or a mismanaged crisis:
Working with friends instead of business partners
Don’t mix business with pleasure! This saying has been with us since time immemorial and it’s true to the core. Starting a business with a friend can be quite stressful, especially if one partner is committed to it and the other has another priority commitment on the side. It can come with a lot of misunderstandings, especially where one party is giving a 100% commitment to the business while the other is mostly absent and wants an equal share of profit and equity.
Failing to utilize contracts
Whether you’re in the service industry or your business deals with a certain line of products, it is crucial to understand the importance of contracts. When hiring employees, contracting suppliers, and even recruiting new clients, contracts will always help build better relationships, show commitment, enforce discipline, and streamline processes. In a recent comprehensive online guide on this particular website, a carefully created contract provides clear details about the responsibilities of each party signing the agreement. At the very least, your contract template should include work description, pricing, payment schedules, due dates, and the “out” clause. Contractual agreements are essential for any business serving a wide range of clients and failing to use them is a mistake businesses can easily avoid.
Falling in love with an idea
Successful entrepreneurs understand that business is not always roses and unicorns. It has highs and lows, yes and no, and stop and go seasons. Things don’t always go as planned, but challenges are taken up positively. If an approach fails to work, you can always go back to the drawing board, restrategize, and flex up to pursue your business goals. The lack of flexibility is something entrepreneurs can easily avoid.
Ignoring intellectual business property
Each business is unique in its own way, from the trademark to the logo, name, company trade secrets, and copyright, among other things. These are intangible aspects and assets of the business, but are equally important. As a proprietor, you are advised to be original in your property to avoid prosecution for infringing other people’s property that might be protected by the law. It’s also important to have your intellectual assets patented or copyright-protected where possible.
Doing it all on your own
Rome wasn’t built in a day, and it sure wasn’t built by a single person. In business, you will need different people to perform different tasks and come through for you when you get stuck. Some entrepreneurs go solo just to slice the expenses, but once you take this route, it’s only a matter of time before the responsibilities start overwhelming you. After all, the size and success of a business are measured by the number of its employees! To add to this, it’s also important to always ensure you’re recruiting the right talent into your business. Don’t make the mistake of hiring the wrong people!
Entrepreneurs start businesses with great zeal, energetic to expand their business over time. Somewhere in the middle, however, many of them end up losing their focus once the money starts trickling in. Money is the leading cause of failure and success. Improper management of funds is something you can easily avoid using various measures, including having a budget and sticking to it, ensuring proper bookkeeping, staying on toes with accounting, which brings us to the next important point.
We invest in businesses for the money and it loses meaning when we get too comfortable to keep records of accounts. Accounting helps entrepreneurs understand business patterns, and gauge whether or not the business is making progress, stagnating, or losing. It makes no sense to run a business, you cannot account for. Proper accounting will help expand your business to greater heights, so don’t make the mistake of ignoring it.
Ignoring market research
Before setting up a business, it pays to conduct lengthy research about the products or services you want to offer, gathering opinions and thoughts from your target market and other players in the industry. It will help you to determine whether you are offering what is needed and not just what you think is needed.
Finally, as long as you’re in business, it’s best to take advice, opinions, and ideas but make the decisions. It also pays to encourage constructive criticism from customers, investors, lenders, and mentors. With the above few pointers in mind, it can be easier to maximize the success chances of your business.