Entrepreneurs mistakes there are many mistakes that many business owners make, and in this article, I’m going to briefly describe eight entrepreneur mistakes that you should avoid being a successful entrepreneur.
1- Diversity, advice from the older version of the same business
Try to be creative and provide new ideas in your business to be unique and stand out compared to the other similar type of business as yours.
Try to take advice from people who are running the older version of the same business and be smart to identify their mistakes to avoid making the same mistake that they were doing.
By just copying the same system as the previous version of your business, people can’t see the difference, and you’ll face many other competitors that you have to compete with.
If you do the same as the previous version of your business, then there will be no innovations, changes, and improvements, then people can’t see the difference.
Always try new ideas to stand out and be different from your competitors. People see the difference, and they’ll sprit the words and talk about it. Especially nowadays, with social media discussions, nothing is sneaky anymore.
When you provide better services, products, and goods, your unique idea will make a difference.
2- Active vs. Passive Business Owners
It is imperative to have a peace of mind with excellent knowledge about the nature of your own business.
That knowledge is important to make sure the operation of your business is running through the right way and how it was running in the past, now, and what n for the future.
At the beginning of running your enterprise, you must be involved in almost all the operational functionalities of your own business and be completely active in your own business.
By doing that and be an active business owner, you will save up the expenses of paying for one extra salary and management at least.
Smart entrepreneurs will work hard in their own business, and they are always active and on top of every hustles and be involved in any day to day decisions and operationally involve around them.
Passive Business Owners
Being a passive business owner is not the same as having a passive income business.
Although both are having similarities about their substantiality of the business owner or shareholders, they are not participating in the day to day physical activities and operations of the business.
Based on the nature of the business, your participation will be different.
In most of the cases, and in general, the passive business owners enterprise has an automated system that has a built-in digitally smart construction and operation that does the majority of the business strategies functionalities are automatic without any physical activities.
An example of passive business owners is an online e-commerce store, which all you have to do is to have your products listed online.
Then your website’s wise strategies and intelligence behind it will work for you globally and sells items without any interruptions.
Some entrepreneurs are just investing in many different businesses and also are not participating in any day-to-day activities of the company (s).
In general, passive business owners are making more money than the active business owners because they have more time to think about the logical strategies on how to increase their sales and making more money by taking care of the business without physically be involved.
However, in other ways, it would be much more practical if you have some knowledge about your products and services.
That will help you to be conscious about who you are dealing with. As well as investing in what type of business, and so on.
3- Unrelated Business Entrepreneurs Mistakes
Another mistake that some entrepreneurs make is to run unrelated business income activities!
There is a limitation for tax exemption for any business which is associate, and if excess of the needs of the except function, they will become taxable.
For example, incomes from posting an add and have more sell under unrelated trade and activities of having advertising, and as a result, your sales increased, it will be tax-exempt for the amount of $1000 only, and if you declare more it will be taxable.
“Publications Advertising Income – Publication advertising-income is often the most significant source of UBIT for exempt organizations.
With few exceptions, the Internal Revenue Service considers advertising income to be unrelated business income, whether it comes from magazines, newsletters, or directories, and whether the publications are produced directly by an association or produced for an association by a for-profit firm according to contract.
Exceptions recognized by the IRS involve truly passive investment income (generally, royalties) from a publication containing advertising, revenue from advertising activities not “regularly carried on,” and profit from a book substantially produced without compensation.” Ref: Association Law Governance, Howe & Hutton, Ltd.
4- Too Cheap Running Enterprise
Being too cheap in running a business sometimes will result in a significant loss instead of saving up.
There are certain limitations of controlling your expenses within your enterprise. If you don’t spend the necessary money, you might lose your reputation, and that can kill your business.
Always try to provide the best of you can even if it’s in a smaller quantity.
You can offer twenty serving of high and fresh quality of food at your restaurant and charge your client with a fair amount of cost, and as a result, your clients will be delighted to pay for what they get.
But if you serve fifty serving food of cheap quality food at a lower price, then you might lose your clients for not providing a portion of good quality food and services.
Nowadays, with the power of technology and the internet, it’s essential to have a website first and spend money on such a necessary infrastructure of your startup business to be known in your local network first.
What is The Important Basic Infrastructure Of Any Startup Business?
- Right Domain Name and Website and Marketing Tools
- Best High Quality, Affordable and Reliable Web Hosting
- Greate Email Marketing System
- Any Necessary Courses That Supposed to take to do the job correctly and professionally, knowledge is power and developing your skills and experience and try to be up to date as much as you can, especially nowadays with the supper growth of digital technologies.
- If you have the money to start up your business, I do suggests outsourcing some parts of your projects or hire an expert to do the job professionally and do not try to waste your time figuring out about how things work. Time is money. You can spend your time focusing on what you already know and use it to improve your business.
- Human resource management. It is crucial to have peace of mind by hiring employees who can handle the job correctly and trust them as well because no business can be successful if the staff gives you less than a perfect job, and that is more costly for your company.
5- Wasted Services as Entrepreneurs Mistakes
Try to minimize the wastes as much as you can.
It is because you’ve already paid for it and want to get the maximum profit out of it.
If you are running a food business, you should calculate each serving portions the way that is enough for the majority of your clients with a minimum amount of waste at the end of the day.
It is a good idea to convince your clients by giving them some extra services or gifts, but it can’t be forever.
At all the time, because your clients are getting used to having the same service or offer and that will increase their expectations and not appreciate what they’ve got as a gift, then if you don’t offer it, they will no longer be loyal anymore.
Smart entrepreneurs will put a time frame for any deals and or special offers, also tries to minimize the wasted services as much as they can to get the maximum profit.
Don’t forget that you are an entrepreneur and have to be smart enough to calculate the ratio for every penny that you spent and how much profit you’ve got out of that free service offers. If your cost is more than your benefit, then you have to change your marketing strategy not to have any wasted services anymore.
6- Legal Entrepreneurs Mistakes
Having peace of mind is very important for all of us.
Some entrepreneurs mistake is that they’re trying to screw the legal nature of their business and put their money and reputation in danger. An example of that type of business is some MLM or Pyramid affiliate systems.
Any type of business that provides or sells products that are not permitted by the law of their local government is at risk of losing everything by their government law.
So, smart entrepreneurs will check all legal rules and regulations or the business before starting it up to not losing everything they have.
Make sure to have your taxes up to date and have a good standing reputation with your government to have peace of mind that everything is running smoothly with legal support.
7- Profits Vs. Value
Some entrepreneurs are trying to do everything by themselves or just using the same staff to do more unrelated tasks to get more profits.
Although all entrepreneurs are looking to earn as much as profits as they can, they should avoid losing their business value to gain more, because no matter what, if you lose your importance in front of your clients, then it’s tough to build trust again and have the same relationship with your clients still.
A big mistake that an entrepreneur can do is to start weak! That means precisely like the first impression when you meet someone new, and that picture will be hack in the viewer’s mind, and no matter how hard you try, the image remains the same in their view.
Moreover, all expert business owners make sure to keep their high value up to stand out in the public views to have the potential to grow high in the future with trust even if there is no or very little profit in it.
Quality of the service is leading you with a high-value reputation, which will increase your profit as soon as people know you, and they sprit the words and leave good reviews for your business and services.
8- Liquidity (cash in hand)
Another big mistake that any entrepreneur can do is to not have enough liquidity or cash in hand during the processing the business.
No matter what type of business you’re running, you need some cash in hand after everything is done and running.
Those liquidities are useful for any emergency needs, such as if you don’t make enough to be able to pay the rent and your suppliers for at least six months.
Even if you run an online business, you need some liquidities to run your advertising campaigns, buy new Softwares, outsource some parts of your applications, and so on.
Although many advertising about starting your own online business with $0, you still have to pay for your domain name and hosting account for one year in advance.
If you do freelancing also, you need your tools to start with and even publicities as well.
The point is that, when you started your business, then you can’t stop it because you don’t have enough money to pay to your suppliers.
As a result, you forced to close the business even if you spent one million to establish your business. That small issue can crash your business down easily, so make sure you have enough cash in hand or another source of income as backup support when you start your business.