In my experience I find that entrepreneurs make four main mistakes when starting a business, and this often leads to their business failing. Here are the reasons:
MISTAKE 1 - Trying to compete on price
Never try to compete on price as a start-up business. You can
make a few short-term wins on price, but ultimately you'll fail. Your only hope
of survival in the overcrowded marketplace is finding your own niche and
providing exceptional customer service.
MISTAKE 2 - Never giving up
Yes, you read that correctly. Never giving up is a BAD thing. In the
fantasy business world of 'Dragons Den' and 'The Apprentice' a macho
never-say-die attitude prevails. But in the real world, being prepared to give
up on something and try something different instead, is a sign of strength, not
weakness. I've seen many businesses collapse because the entrepreneur didn't
know when to give up on a bad idea, and try something else instead.
MISTAKE 3 - Working too hard 'in' the business rather than working 'on' the
business
Don't waste more than half of your total time doing work for clients.
If you do this then you'll just end up being 'self-employed' (which is not the
same as running a business). Once you are spending more than 50% of your time
working for clients, either get some staff to do it for you, or sub-contract
the work to someone else.
MISTAKE 4 - Starting a business for the wrong reasons
Too many people start a business for the wrong reasons. Being made
redundant is NOT a good reason. Wanting to
be rich is NOT a good reason. Wanting to have more free time is NOT a good
reason. Calling yourself a ‘Managing Director’ is NOT a good reason. And owning
a flashy car is definitely NOT a good reason. If you haven't got a really good
reason for starting your own business, then DON’T. Get yourself a job instead.
Moral of this story: there are only two good reasons to start your own
business: firstly, so that you can follow a passion that you have in life; and
secondly, because you want to deliver exceptional service within your chosen
field.