10 Mistakes Most People Make When Starting a Business
According to Bloomberg, 8 out of 10 entrepreneurs who start businesses fail within the first
Why do businesses fail?
Aside from few other reasons, business failure could be as a result of some mistakes from
the business owners.
In this video, we’ll be sharing with you 10 common mistakes people make when starting
a business and we hope some of these points prepare you to be a better entrepreneur.
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Mistake No. 1 Believing market research
Toward the end of 1990s Dean Kamen conceived a transportation invention to be called Segway.
Kamen was so excited about his invention, so much that he believed Segway was going
to grow so big and replace the cars as we know it.
Kamen’s excitement was so huge that great entrepreneurs like Steve Job and Jeff Bezos
was motivated to invest several millions of dollars into his invention.
Kamen had done his market research and he was bold to predict that the company would
soon be producing hundreds of thousands of Segway vehicles after launch.
Segway was launched in early 2000 and nothing happened.
The product was not accepted by the market after several millions have been spent on
What is happening here?
Why do businesses fail, even after carrying out great market research to know what the
Well, here’s the truth; Market research isn’t the best way to know
what people want because people themselves don’t know what they want.
As humans, we usually think we’re so smart that we know what we want and what we don’t
but when it comes to buying something, we usually act based on our emotions, not brain.
So, what’s the way out?
The best way to know a product that will sell is to observe what people are doing, not what
they are saying.
One of the greatest entrepreneurs to ever live, Andrew Carnegie said “As I grow older,
I pay less attention to what men say.
I just watch what they do”.
If you want to launch a successful product, pay attention to what people are doing, not
what they are saying.
People are likely to buy more of what they are buying now and they are likely to buy
a better version or a modernized version of what they have bought before.
No. 2 Working alone
As at the time of making this video, there are about 33 million businesses in the United
States, but guess what?
22 million of those businesses have no employee or team.
If you understand how business works, you’ll not be surprised that most businesses fail.
Listen to this; business is like a war, no one goes to the war front all alone.
Individuals don’t build business, only team can.
If you want to succeed as an entrepreneur, you must learn how to work or partner with
other good minds because two are better than one.
No. 3 Working with friends or family
I’ve never tried to do business with a family member because I can’t see how that will
work out but I’ve tried to work with some friends before and that happened to be one
of the worst business decisions I’ve ever made.
Because some people understand that they can’t do it all alone, they then choose to work
with their friends or family members.
The problem about doing business with your friends or family members is that these group
of people sooner or later will start feeling entitled.
They would either think that they deserve more share of the company or they’ll think
they deserve more pay or less work.
Business is a serious game.
Don’t play it with your friends or family members.
No. 4 Seeking finance too early
Most people who want to start business usually think the number one problem they have is
money but that’s not true because when you’re just starting a business, there are hundreds
of things you don’t know and tens of mistakes you’re going to make.
Those mistakes will not crush you if your investment is not huge but if you’ve put
in a lot of money, a single mistake can crush your entire business.
If you’re just starting out in business, don’t dream of having a lot of money.
Get started as small as you can so that you can make required mistakes, fail and still
remain in business.
No. 5 Not choosing a great business name
I once spent about three months thinking about the right business name for one of my businesses.
It’s that serious.
The reason why your business name is very important is because people always judge the
book by its title.
Napoleon Hill once changed the name of one of his books.
Without changing a single word from the book, the sales jump up because of the new name.
As small as it may seem, a wrong business name can destroy your business so take time
to be creative with your business name.
No. 6 Expecting success quickly
If you get a job today, you’ll get paid within the next 30 days but if you start a
business, you may not get any reward in the next three months or even one year.
Unfortunately, most people who start business usually have high expectations.
They want something to happen and they want it very fast.
I’m sorry, you have to be patient if you want to build a company.
No. 7 Not using the internet to promote their businesses
Even till this morning, most people of the world still don’t understand the power of
Several people who have small business don’t use the internet to promote their businesses.
If you have a business in 21st century and you don’t use internet as marketing tool,
you probably don’t have a business.
No. 8 Planning only for success
One thing that’s very common among entrepreneurs is that, most of us are optimistic.
That’s understandable because if you’re not optimistic, how on Earth are you going
to dream of creating something out of nothing.
However, this becomes a problem somewhere along the way because you’re not having
adequate planning for the unexpected.
Don’t just plan for success.
Make some plans for failures too.
No. 9 Spending more time on little things
One of the most successful entrepreneurs to ever live, Henry Ford said, “Thinking is
the hardest work therein”.
When it comes to business, there are too many little things that bring no result for the
Such things should be delegated so you’ll have time for truly meaningful things, things
like thinking, reading strategizing and marketing.
No. 10 Being emotional
Whether you want to employ people, negotiate a deal or buy some raw materials, you’re
facing the temptation to be emotional.
Now imagine what it means to allow your emotion to dictate who you employ?
Imagine allowing your emotion to prevent you from firing someone you should?
Imagine being emotional when negotiating a deal?
As an entrepreneur, you must strive hard to be frank, tough and if possible unemotional
when making business decisions.
In summary, if you want to succeed in business, you must avoid the above stated mistakes;
Don’t create a product based on what people say.
Pay attention to what they do.
Don’t work alone.
Build team and work with other people Don’t go into the business with your friends
or family members Don’t seek finance too early.
Be creative about your business name Be patient.
Don’t expect success quickly Use internet extensively to promote your business
Spend less time with little stuffs Don’t be emotional.
Be strong, tough and rigid
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