Starting a new business can be exciting, challenging and overwhelming. As a new entrepreneur in the business world, don’t miss this post.
Nigeria, with its dynamic and vast opportunities, is a fertile ground for aspiring entrepreneurs like you to start a business. However, new entrepreneurs often make mistakes that can hinder their success.
According to statistics, a significant percentage of businesses fail within the first few years. While there are a handful of reasons, there are recurring common mistakes entrepreneurs have often made that always result to business failures.
Understanding these common pitfalls and learning how to avoid them can pave the way for your business to thrive.
Therefore, this blog post is the edge you need to stay afloat as a new entrepreneur in Nigeria. Let’s look at the common mistakes entrepreneurs make in business and how you can avoid them.
Who Is An Entrepreneur?
An entrepreneur is an individual who creates, operates and manages a business, taking on financial risks to do so. Being an entrepreneur means being able to create something innovative out of an idea or a passion with a willingness to take risks. Although entrepreneurship paves the way for you to be your own boss, it’s usually not a bed of roses.
Entrepreneurs usually play a crucial role in driving economic growth by introducing new products/services, creating jobs and fostering competition.
Common Mistakes New Entrepreneurs Make
These common mistakes of entrepreneurs will guide you to understand certain things you shouldn’t do as a new business owner. However, if you’re already an entrepreneur, you could learn a thing or two from this post. Let’s dive in.
#1 Not having a well defined business plan
Many businesses fail because they lack a solid business plan. You have a big brilliant idea, however, running a business with your idea alone is a recipe for disaster. You need to understand the goal of your business, your target audience, market demand, marketing strategies and competitors analysis.
How to avoid this
The foundation of every business lies in this first step. Before you even secure funding or gather a team, you need to craft a well-detailed business plan.
- Set a smart goal: A smart goal is usually specific, measurable, attainable, relevant and time bound. This should include your why, who, how and what.
- Do a thorough market research: Research your industry and find out if your product has market demand. A product with little to no market demand is not worth starting.
- Create a detailed buyer persona: Who is your product/service targeting?
- Understand your unique selling point: What sets you apart from other businesses in your industry?
- Financial analysis: Create a detailed budget that would cover startup costs and expenses from getting supplies.
#2 Expecting returns too soon
You’ve finally launched your business. You’re eager to start seeing revenue pour in. However, building a successful business takes time, effort, consistency and patience.
Giving up a few months after you launched because you haven’t seen significant returns is a mistake you should avoid as a new entrepreneur. Expecting returns too quickly can lead to burnout, discouragement and frustration.
How to avoid this
As a new entrepreneur, your focus shouldn’t be on quick gains, rather you need to focus more on how you can provide value for your audience.
- Have you drafted your business plan?
- Is your customer service top-notch?
- Is your product/service giving ultimate satisfaction to the customers?
At this stage of your business, these are questions you need to ask yourself to ensure you’re still on the right track.
Additionally, celebrate little wins. At the end of the day, every win is a win and shouldn’t be overlooked.
Remind yourself why you started your business and remember that you’re in for the long run and not just a one-time game.
#3 Not staying updated on market trends
The business world is an ever-changing landscape, consumer preferences shift and even new technologies emerge. Entrepreneurs who fail to stay updated with the market trends will technically be left behind.
How to avoid this
Adaptability is a core skill every entrepreneur needs to learn. To stay updated, you need to learn how to do the following.
- Market research: Regularly conduct market research to stay updated on the evolving needs of your audience.
- Stay updated through learning: Always upskill yourself in your industry. Find out new ways to make your product/service stand out.
- Competitive analysis: Keep an eye out on what your competitors are doing, analyze their strategies and identify market gaps as opportunities to gain a competitive edge.
#4 Ignoring customer feedback
Most times, new entrepreneurs get so focused on the product/service they’re offering and forget to listen to the people they’re offering it to.
When it comes to scaling a business, customer feedback is a goldmine which should never be overlooked. Entrepreneurs who ignore customer feedback miss out on opportunities to build relationships with the customer. This will ultimately lead to decreased sales and loss of customers.
How to avoid this
A customer-centric business is one where the business owner listens to their customers and builds quality relationships. So, there is a need to proactively reach out to your customers after a purchase to find out how the process was for them and if they experienced any difficulties while working with you.
#5 Underestimating costs
Becoming an entrepreneur goes beyond launching that brilliant idea. Failure to properly estimate startup costs can put a serious financial strain on you. This could lead to debt accumulation, an overwhelming feeling of pressure and ultimately-business failure.
How to avoid this
Here are a few ways to avoid this
- Create a detailed budget: Develop a detailed budget that covers expenses from operational costs to variable costs and unexpected expenses.
- Research thoroughly: During your market survey, take some time to research prices for things you need from supplies to services. always create room for miscellaneous in your business budget.
- Track your budget: Analyze, track and review your budget and compare it with actual expenses.
#6 Poor management of cashflow
Cash flow is seen as the net amount of money that goes into and out of a business. A positive cashflow is one in which there is more money coming into a business than the amount leaving it.
Poor management of cashflow can lead to debt accumulation and an inability to pay bills.
How to avoid this
Monitor cash flow regularly. Create a system for invoicing, managing expenses and forecasting future cash needs. Avoid making unnecessary expenses, and learn to budget every single money you spend on your business.
#7 Overlooking marketing strategies- A common mistake of entrepreneurs
Many entrepreneurs underestimate the importance of marketing. A great product/service won’t sell without effective marketing.
Overlooking marketing strategies which include both digital and traditional marketing makes it very difficult to reach your target audience.
Additionally, this leads to low brand awareness as most of your potential customers don’t even know what you offer.
How to avoid this
Develop a marketing strategy that aligns with your business plan. This includes your marketing goals, target audience, and platforms where your audience is usually active. Utilize social media, content marketing and emails to reach your target audience.
Furthermore, create a budget for your marketing goals as you might need to implement paid advertising.
#8 Inability to delegate tasks
Being busy does not equal being productive. Many entrepreneurs, especially in the early stages of their business fail to delegate tasks and create room to focus on what’s important.
This, however, can lead to burnout, decreased productivity and limited growth.
How to avoid this
Acknowledge that you can’t do everything yourself and that delegation is essential for growth. Employ people who have the willingness to work and the ability to be adaptable. Surrounding yourself with the right people is key to business growth.
Also, delegate tasks that are repetitive and focus on growing the business.
#9 Scaling too soon- A common mistake of entrepreneurs
Scaling a business is a natural goal for any business owner. however, scaling too soon especially as a new entrepreneur can lead to disaster.
Scaling too quickly can make you lose sight of your brand goals, put a strain on your finances and can even lead to poor customer service.
How to avoid this
Focus on building a strong brand foundation that customers can trust. Create a detailed plan for scaling which would include budgets and hiring a team.
#10 Lack of focus
As a new entrepreneur, you might get tempted into thinking your business idea is no longer as profound or great as it felt in the beginning.
You’re busy comparing your business with that of those in your industry, thereby losing sight of what matters.
Before long, you’re pulling yourself in different directions trying to invest in businesses that you do not even understand. This common mistake made by entrepreneurs is the reason why some don’t last in the business world.
How to avoid this
Authority is not built in a day. Rather than stretching yourself thin trying to be in every industry, focus on making the most in your niche. Losing sight of your goal can lead to confusion and lack of direction
Create a clear roadmap for your business growth, and always remember to regularly review your progress and adjust your strategy as needed.
Additionally, learn to say no to projects and opportunities that do not align with your business goals
Conclusion
Building a successful business in Nigeria is a challenging but rewarding venture. On some days, it feels like you have it all figured out and other days, you don’t even know what you’re doing.
However, by understanding these common mistakes of entrepreneurs, you have a huge chance of making the most out of your entrepreneurial journey.
The road to success won’t always be smooth, but with these common mistakes out of the way, you have an opportunity to create your dream business.
Struggling with your small business? Drop your questions in the comment.
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