Are you a first-time entrepreneur? It’s a bit scary, isn’t it? But you went into this to win and you are determined to make it work! Good for you! That’s the most important quality of successful entrepreneurs-determination.
Lots of businesses fail in the first year or so. Why is that? We’ve nailed down at least 10 reasons why this happens in this post so that you can think about where you’re at in each of these and avoid that iceberg yourself as you sail into success.
Failure to Plan
One of the biggest reasons that first-time business owners and entrepreneurs fail within the first year is the failure to plan. It turns out that the old saying is true “Those who fail to plan are planning to fail.” Not to sound cliche, but it is common sense that if you do not have a plan then life will have a plan for you.
It is important when you are first starting out as a business owner to have a business plan and try your best to follow it.
You do still have to remain flexible to change and realize that there will be times that you cannot follow your plan precisely. But you should still have a plan in place so that you will have a roadmap to follow.
Lack of Vision
Another important reason as to why new entrepreneurs do not succeed is that they have a lack of vision for the future. They should be ambitious, but having vision is about more than being ambitious about your own goals. It is also about where you wish to take your company within the next year 5 years or 10 years and what you hope to contribute to the world or the industry you’re working in.
Failure to Use Resources
Another common mistake of new business owners is that they fail to use the resources they have available to them. Resources can be people, money sources, and even friends or freelancers you can get to outsource work to as you grow your business. Look online and connect to people who can help you through Linkedin and social media as well. Your resources can be anything that can help your business reach its goals. So always be open to what is out there.
This reminds me of a TV ad by Orson Welles and one of his last TV appearances when he was advertising a wine. He said, “We will sell no wine before its time.”
The company that Welles was advertising in the ad was saying that they would not put out anything until it was ready for market and was the best quality possible. That is a good rule of thumb and it is also a good idea to not invest too much in your company until you can afford to do so.
Many businesses literally go out of business the first year because they want a huge office, elaborate staff, and the best accommodations. Remember what Tom Smiley of Simply Media said.
He said, “You were only have to worry about four things: creating, selling, delivering, and getting paid. You can do that from your own home office if you have to. So don’t extend beyond what you can afford so that you will survive until tomorrow to tell about it.
Failure to Set Realistic Goals
The failure to establish realistic goals is not the same thing as a failure to set goals. As we enter a new year, remember that it is just as important to set goals that you can reach as it is to set goals at all.
If you set goals that are too hard to reach, you will get frustrated with the fact that you cannot reach them and many entrepreneurs give up at this point. Instead set smaller goals that you can reach within a set period of time such as six months and then see where you’re at. This will encourage you to keep moving forward and will keep you from being discouraged.
Listening to Others Too Much
Believe it or not, it’s good to listen to others’ experience at times. Don’t listen to other entrepreneurs talk about their failures unless they tell you how they turned it around into a success. This may only serve to discourage the new entrepreneur. If you do listen to what others have done, simply learn from their mistakes and move on.
Don’t get caught up in the negatives regarding entrepreneurship. There are plenty of headaches you will encounter along the way. Just do your own thing the best you can do it and always look toward the horizon. Believe in yourself and never let anyone tell you that you can’t do it.
Admittedly, I find myself falling into this category and did Steve Jobs and Warren Buffett, to name a few. Entrepreneurs are inherently innovative and creative and we sometimes forget to take the time to clean up the clutter and organize.
But if you’re going to conduct business in a professional manner, you must keep up with things such as your financial books, invoices, office materials, and projects. Your customers trust you to be organized with their projects. Getting organized also helps you to save time. Take the time to get organized and you won’t regret it.
Establish a reserve fund
You should always keep a healthy reserve of cash on hand for your business. If you lose your reserve money, you may find yourself up a creek without a paddle. You never know what’s going to happen with entrepreneurship or how well off that you will be for one month to the next. You can predict this with some certainty but you never know when the next roadblock may come. Preparing for a rainy day but hoping for the sunshine is the best philosophy that an entrepreneur can have.
You would be surprised at how many entrepreneurs have misconceptions about how they are to conduct business. There are plenty of expert entrepreneurs out there who will give you advice on what you should do to get started and keep your business going.
While there is some value in listening them to a point, remember that there is no solution that is exact or promised to work. Every entrepreneur must decide what is best for their company and find their own voice in the world. Don’t assume that you should have the latest equipment, technologies, or even the most cutting-edge financial payment system in order to be successful. If it works, don’t fix it.
Poor Time Management
Managing time is the most challenging thing that an entrepreneur has to do whether their setting is in a huge office in the middle of Silicon Valley or whether you just have a one-room office in your home.
You must set a general schedule and try to adhere to it as much as possible so that you are working out blocks of time to work on your business. List projects in order of priority and schedule exact times to work on them.
It’s all about the work and getting the project done by your deadlines that matter the most. But you should still set approximate times that you will dedicate to working on them. If you do not manage this part of entrepreneurship, then you might as well close your doors now. Time is money and the effective and successful entrepreneur is the one that has learned how to use it wisely.
Summary: Chart Your Own Course
We hope that you have learned something from these practical tips and that you’ll find a way to use them in your business. The main thing is to have a plan, work the plan, schedule, look to the horizon, and never take your eyes off the goal.
You’ll make it if you never give up!