It's hard to avoid mistakes, especially in business. In fact, many of the following mistakes are hard to avoid especially if you're starting out. But you got the edge. Avoid these mistakes and you'll find yourself ahead of everybody else. So what are the 9 Crazy "Wacko" mistakes entrepreneurs make? Here they are:
1. The Customer Owns You
Whenever you have a business where more than 50 percent of your profits come from any one customer you may be headed for disaster. Although it is easier to deal with a small number of big customers, you become vulnerable when one of them goes out of business (yes, it happens). Always seek new business and diversify your profit sources.
2. Creating products before testing.
You and your team have an awesome idea. A brilliant idea. You spend week maybe even months, going through with that idea. Then when you finally bring it to market, no one buys. Sounds like you? I hope not.
Unfortunately entrepreneurs are so in love with the idea that they never take the time to determine if people cared enough to pay money for it. Be smart and don't make this mistake.
Do the "market research" up front. Test the idea. Speak to potential customers. Get pre-orders. Just don't spend so much money creating a product that will not sell.
3. 50/50 partnerships
Suppose you are the world's greatest marketer, but you need a management guy to lead the team. Or you are a technical mastermind, but you need someone to generate leads to acquire customers. Or maybe you and a friend or relative start the company together. In each event, you and your new partner split the company 50/50. That seems hunky-dory right now, but as your personal and professional interests begin to differ, it's a sure fire way to cause drama and bring down business. Both party’s veto power can stop growth and development of your company, and neither holds sufficient votes to change the situation.
So what's the solution? Simple. Someone has to be in charge. Make that individual CEO and give them the largest ownership stake.
4. Playing the Low Price Game
Some entrepreneurs believe they can be the low price player in their market and make huge profits on the volume. Will it work? Maybe. But you are what you attract. Low prices attract cheap people. You don't want cheap people as your customers. They complain often even though you game them the best service/product. Plus, cheap people are so tight with their purse strings that it takes too much time to sell them on something.
Instead, match the price with the quality of your product or service you provide. How do you decide on high you can go? Raise prices. Then raise them again. When customers or clients stop buying, you've gone too far.
5. Bad Projections, And NOT ENOUGH Capital
This might be hard to avoid but as your business begins to mature, you can predict how much it will make. Check your business assumptions. Don't be like the failing entrepreneur with optimistic sales projections, too-short product development timeframes, and unrealistically low expense forecasts. Be realistic with your projects, think conservatively but strive to always be better. Many businesses are simply undercapitalized. Have the cash reserves to weather a downturn.
6. Out of Focus
If you're like most entrepreneurs, you have neither the time nor the people to pursue every opportunity. But many entrepreneurs - hungry for success and thinking that "more is always better "- feel the need to seize every "carrot" dangled in front of them. In other words DON'T spread yourself too thin.
7. "Look at Me, Look at Me, I'm Successful" Expenses
Many businesses have an untimely death from excessive overhead. The best entrepreneurs know how to stretch their cash and use it for business-building processes like product development, marketing, and systems management. Skip out on the fancy furniture unless your business is booming and you have expendable cash. Until then, keep your overhead expenses low and instead invest it in areas that are directly needed to become more successful.
This disease is often found in entrepreneurs who will not release products until they are absolutely perfect. Perfection is unachievable and very costly at that. Because while you're too busy getting it right, the market is changing right out from under you.
Now, what's the antidote for this disease?
Focus on creating a market-beating product within a deadline and make a delivery date. When your time's up, it's up. Release your product.
9. Not admitting your mistakes.
Of all the mistakes, this is the biggest. Don't let your ego get in the way because at some point you realize the "freedom setting" truth: you have made a mistake. Admit it quick. Remember there is no such thing as failure, only feedback. If something is not working, trying something else.