Mistake #1: Business plan
The first mistake is inability to understand your project’s economics and decide on a business model.
Most young entrepreneurs do make a business plan, but you’ll need to look beyond that, towards a business model. A business plan in itself is merely an algorithm, a roadmap of the first steps you’ll take after launching a project. But that’s not enough. A founder must decide what their product will be, which market it’s made for, and how it’ll be promoted – in essence, an in-depth description of all key business processes and nuances. Only once you have a developed business model can you start on a business plan. First, understand how you’ll be making money, and then develop a step-by-step action plan.
Mistake #2: Unique product
If you believe that your product has no equal, that it is unique and one of a kind, and that no one has ever made anything like it, you need to ask yourself something. After all, if customers need this, they must already have a way to fulfill that need. And if they don’t, then maybe no one actually needs your product?
“People are really afraid of inventing the bicycle. I’ve not seen a project offer a one-of-a-kind product and then successfully function for longer than five years. In truth, success is not about creating a unique product, but about copying one and adapting it for a specific target audience,” says Tatiana Vinokurova.
Mistake #3: Perfect product
Too often, entrepreneurs become fixated on making their product perfect and put off sales. But improving on an idea without customer feedback is akin to living in a world of your own. It’s better and more efficient to make a product that’s more-or-less ready for the market, start selling it, and then use feedback to decide what needs fixing.
A basic principle of success in business is flexibility. Plenty of entrepreneurs don’t like their product and would like to see it done in a different way, but what they’ve already got is popular with clients. Sometimes, your vision of perfection will not match that of the market. In that case, it’s better to leave your mass-market product untouched and launch another project in a pricier segment of the market.
Mistake #4: Wrong people
“In any business, the team is everything. Many beginners lack the ability to hire a professional team and end up hiring whomever – friends, acquaintances, relatives. A seemingly temporary solution ends up the core of a faulty approach in which your team is made up of the wrong sort of people. It’s important to keep in mind that a “good person” is not a profession. First and foremost, you need specialists with specific skills and competencies, or you risk sinking your project and squandering your idea,” says Tatiana.
Knowing how to assemble a team is a skill of utmost importance. You must have a clear vision of the kind of people you’ll need if you want to start a business, get every process moving, and keep everything working well. You can’t hire staff with an “as long as it’s someone” approach. Learn to create a recruiting funnel so that you have a choice and the ability to mindfully take on new staff.
Mistake #5: No sales plan
Sales are the heart of any business. And as a heart cannot function without blood, so is a sales department pointless without a sales plan.
You must learn what a breakeven point is, how to calculate it, and how to observe its dynamics. Don’t work for the sake of working, as that won’t lead to good results. Don’t shirk from calculations. It’s an important point for your sales managers, too: people must know what they get paid for and which performance metrics they must focus on.
Mistake #6: Ignoring your competitors
A major issue for many an entrepreneur is an unhealthy perception of their competitors. They either underestimate them or, conversely, imagine them as something bigger than they really are.
It’s important to keep an eye on the companies that have made a name for themselves in the market you’re entering. Draw yourself a map: who works in the same market segment, what is their share, who’s the leader, how they became successful, what makes you different from or better than them. Treat your competitors as teachers, and keep your relationship with them clean and based on a win-win approach.
Mistake #7: Going mentor-free
It might seem like no one is going to help you for free, but there is actually a large number of entrepreneurs willing to help out and communicate with newcomers for no reward. Sharing knowledge is trendy right now. So if you can’t hire an experienced business consultant, then find a mentor interested in what you do.
“Remember that sometimes an hour of chatting with an experienced entrepreneur might save you lots of money and years of experiments. Talk to people, be friends with them, and visit events; opportunities come to us only through others,” explains Tatiana Vinokurova.
Mistake #8: Giving up early
This may sound banal, but any business has its problems. No one ever launches a project and sees it develop miraculously on its own, meeting no obstacles. Unfortunately, the reality is that your path will always be difficult and twisted, so make yourself ready. Don’t give up halfway through: you might end up bailing only a step away from success. Prepare to fight for your product, promote it, and stake your claim on your part of the market.