Common Mistakes Entrepreneurs Make

 By Marita Greenidge

Being around entrepreneurs, and actually being one myself, you learn a couple of things about what you should and shouldn’t do when starting and running a business. Yes we entrepreneurs make a ton of errors when starting out, especially if we don’t have a shepherd (of course I had to make a plug for shepherding somewhere), so let’s look at some of the most common mistakes. Maybe this can help you to avoid these pitfalls.

1)      Keeping subpar accounting records

This is quite cliché by now but there’s a reason it’s a cliché. Because it’s so true! Despite the myriad of advice about the benefits of keeping proper financial records, entrepreneurs still make this mistake. Unfortunately this means that they don’t have an idea of the amount of money the business is generating, total expenses incurred, which products and services are most profitable and host of other great information that could help in improving operational efficiency and by extension profitability. Not to mention that around tax time it’s really difficult to determine what is really owed to the Government.

2)      Assuming that their product/service is so fantastic that as soon as they begin selling persons will line up around the block for purchase.

This is clear overestimation of the market potential for products, without clear consideration of ideal target markets. It’s often backed by a poor marketing strategy. Entrepreneurs need to consider the benefits offered, who can gain the most from these benefits and who can actually afford to pay for the benefits. Just because persons think it’s cool doesn’t mean they are going to outlay the money to get it or can even afford it! Furthermore the company should be offering benefits that stand head and shoulders above the competition. All promotional material should then be targeted to cost effectively reach the most lucrative market.

3)      Thinking narrowly as it relates to marketing promotion.

Advertising is not the only tool in the marketing communications arsenal.  Neither are television, radio and newspapers the only channels through which to reach an audience. Many persons fail to consider direct marketing tactics such placing product information in mailboxes or handing out fliers in key locations. They don’t think about getting positive news about the company consistently published or broadcast via major communications channels. They don’t think about networking and personally getting out there and selling the product to the market. A friend who will soon be opening a candy shop told me he was going to hop on his bike and get out there and hand out information about his business to everyone he passes. Now that’s cheap and possibly effective marketing. If that information is combined with a sales promotion it may really get customers through the door.

4)      Constantly acquiring customers instead of trying to retain and build value from current customers

Many entrepreneurs are always out there trying to get more “new customers” to buy without looking at how they can get the ones who already came and liked the product/service to come back. The effect is continual focus on customer acquisition which is very expensive. Entrepreneurs need to put systems in place to collect information on all customers so they can later use that information to more effectively (and profitably) engage their customer base. Email marketing, mobile marketing and social media marketing are great ways to achieve this.

5)      Giving little thought to execution

Entrepreneurs can sometimes come up with fantastic ideas as it relates to marketing and operating their business but the real challenge comes in the execution of those ideas. Many underestimate time lines and resources (money and people) necessary to make an idea a reality. Many ideas need to be seriously thought through and planned before they can be brought to fruition. Often entrepreneurs think it will be so easy and that’s usually not the case!

There are a few other mistakes floating around in my head that I can add but at the risk of giving you too many words to digest at this point, I will halt here and save some more information for another day. Stay tuned!