Fear. It’s a powerful, primal emotions; and fear of failure is likely to prey on the mind of every business owner. A certain amount of fear is healthy, as it helps us assess and avoid risk; however, it can also be a huge obstacle to the fulfilment of goals, hopes and dreams.
For a new business, an element of uncertainty is inevitable, and taking risks is essential. Every business will experience ups and downs, and every successful business leader will have made multiple mistakes on their way to greatness. What many of us don’t realise is that setbacks and mistakes are, in the end, the very experiences that enable us to learn and grow. It is key to see these, not as failures or obstacles, but as ‘lessons’ that help us identify skills, shortcomings, and strategies.
Beat the fear to beat the odds
It is an alarming fact that a massive 60% of new business fail within their first three years of operation. 20% don’t even make it past year one! No wonder business owners are so frightened of making mistakes.
However, fear of failure can prevent people from taking bold and necessary actions. Furthermore, fear of judgement or humiliation can also lead to businesses comparing themselves to their competitors, leading to feelings of inadequacy. As a result, following an obvious error, too many people will look to downplay its severity, ignore it, or try to forget about it.
By contrast, successful business leaders are those who embrace their mistakes, learn from them, recover, and readjust their strategy. That’s why one of the most important things when building a business is having the right positive mindset. However, with that said, there are several common mistakes that can easily be avoided in the early stages.
Five common pitfalls, and how to avoid them
So, what are the five biggest mistakes that people make when starting a new business venture?
1. Going in without a plan or strategy
Too many entrepreneurs have a great idea, but an incomplete plan of how to turn it into a successful business. No matter how exciting the vision is, without a proper plan, it’s impossible to effectively communicate it. That means stakeholder from the wider team to investors, and even customers, won’t fully understand the business or product. Furthermore, without a comprehensive strategy, it is far more likely to waste time, energy and resources.
Plan meticulously to avoid this pitfall. Consult widely and deeply to take advantage of those who have gone before you. A business plan should include thorough details of goals, sales targets, financial information, marketing strategies, and more. A big part of it relates to understanding your target market…
2. Not understanding the market
Many new businesses have a fantastic product and a thorough plan but don’t fully understand the market in which they will be operate; therefore never achieving the success their product deserves.
The first step is correctly identifying the right target audience for the product or service. Then, studying and researching the market is essential to understand the wants and needs of your potential customers—the better you understand them, the more effectively you can reach them. Learning their behaviours will give you the best chance of marketing both yourself and your product.
3. Lack of expertise
Confidence and self-belief are probably some of the most important factors in the success of a business (after the initial concept, of course). However, they can sometimes come at the expense of true expertise in the field.
In order for a new business to stand out in a crowded market, it must be able to demonstrate true industry expertise. Entrepreneurs without a solid and thorough understanding of their sector have the potential to be outmaneouvered by competitors (more on this later).
If you don’t have the expertise yourself, it’s vital to ensure that the relevant knowledge and skills exist elsewhere within the team.
4. Refusal to delegate
Many entrepreneurs have a desire to do everything themselves, and a reluctance to delegate responsibilities. A business will never succeed with a single person trying to manage the whole operation.
One of the most essential leadership qualities is the ability to let go, and trust others to do the job they are there to do. Everyone has very particular skills, strengths, and weaknesses. Identifying your own is a key step in building your team of experts, each with the correct toolkit and experience, and then delegating responsibility accordingly. Delegation enables a business leader focus on where they can add the most value to the company.
5. Ignoring Competitors
As previously mentioned, it is important not to be fixated on the activity of your competitors, or to constantly compare yourself. However, this can be taken too far, where some new businesses pay no attention at all to the competition.
Understanding strengths and weaknesses applies to businesses as well as individuals, and one key threat to every business is its competitors. Understanding the competition will help you to predict their moves, to make your offer more attractive, and to identify gaps in the market.
New ventures should offer something unique, so it is important not to copy or imitate a product or service which is already available in the market. Yet by observing them, learning from them, and understanding their strategies, you can begin to learn from their failures and successes—just as you learn from your own.
“Try Again. Fail Again. Fail Better.”
These five common pitfalls are encountered by many fledgling businesses and can largely be avoided with careful preparation and planning. However, it’s crucial to bear in mind that in the lifetime of your business, making mistakes is inevitable.
Instead of fearing them, learn how to make the most of those mistakes. See them as moments of learning, and opportunities to make any necessary changes to your strategy and model. Set realistic expectations for yourself. Keep putting your own ideas into action but always listen to feedback and learn from your experiences. Above all, don’t be afraid of failure; in the words of Samuel Beckett, learn how to ‘fail better’.