Small Business Failure
Pitfalls in Small Business
Written by Chukwuma Asala for Gaebler Ventures
What are some of the rookie mistakes people make when starting a small business? Several things can often go overlooked and cause some growing pains in small business.
Here are some of the most common pitfalls in small business growth:
Lack of Mentorship
Mentorship will eliminate most of your mistakes. Not all of your mistakes, but most of your mistakes. Not having a mentor or thinking you don't need one is not smart and will almost guarantee you will fail in business. No one is able to make enough mistakes on his own to figure out everything he needs to know in order to be successful in business. You have to leverage the experience of someone who has navigated the entrepreneurship trail successfully. This will give you added confidence knowing that you can bounce ideas of someone who has most likely been in similar situations that you will experience your first year.
Focusing on results, not growth
Most business owners who are new to the world of entrepreneurship are usually very impatient about results. Obviously no one gets in business to not make a profit and be in the red but it is important you develop some buoyancy with regards to the results you get, especially in the first few years. It is more important to focus on the growth of your business based on variables that are not necessarily revenue related. Usually financial growth of a business is a correlated with a number of intangibles which vary from one industry to the next. If you focus on results you will not get results IF that is the only thing you focus on. Results are important but not more important than growth. The issue with focusing on results is results are temporary. Fast growth and permanent growth are two totally different things. Figure out what the "pulse" of your business is and monitor those things more than your profits and you will be amazed at the stability your business develops over the first few years. And of course eventually the profits you seek will come.
Underestimating the time and effort involved
The toughest thing for most people to do when first starting a business is to switch from having an employee mentality to a business owner mentality. Employees tend to focus on minimums because their effort is based on their job description. They work a certain amount of hours to get a certain paycheck and once they're done they go home. A business owner is the total reverse and focuses on maximums because maximums are usually just enough to get you moving forward in business. The challenge with underestimating the time and effort involved is that you don't set yourself back one year, you usually set yourself back close to five years. Ninety-five perfect of businesses that get started end up failing within the first five years because of this. If you can go into the world of business not expecting to sleep much until your business takes off you will have a better chance at success. But if you have a limit on how much time, money, or effort you are willing to invest and put into your enterprise you might as well quit before you even get started.
Chukwuma Asala is an international student from Nigeria who is studying to earn an MBA from the State University of New York in Albany. He has analyzed more than 20 industry case studies throughout his education thus far, and hopes to bring some of his business knowledge to Gaebler.com.
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