10 Pitfalls of Entrepreneurship to Watch out for – When your business is growing, and you’re continuously re-adjusting your sails to get better customers, profits, and people, you tend to make some mistakes even when you’re very wary about your environment. No, it’s not your fault. There are upsides to entrepreneurship, and there are also downsides. If you heed these downsides beforehand, you may avoid them, which may help you save loads of money, time, and effort.
In this Pitfalls of Entrepreneurship article, we will emphasize ten specific pitfalls of entrepreneurship and how to be wary of them so that you can prevent them.
Pitfalls of Entrepreneurship
Various pitfalls of entrepreneurship are listed below:
1. Don’t get caught up in the idea
The idea doesn’t pay you money. The flawless execution of the concept does. Moreover, you must know whether your idea is worthy enough to reap benefits. If not, then it would be just a waste of time. Thus, you need to ensure you don’t have only one idea to implement in entrepreneurship.
Do the following things to get rid of this getting-caught-up-in-one-idea syndrome.
- Before testing any idea, don’t think the idea will work. Entrepreneurship is a matter of risk coupled with successful implementation. So, do market testing with the idea and see whether it has any value. Otherwise, go to the next idea.
- When people start their entrepreneurship journey, they usually suffer from idea paralysis, and they get busy with one idea only, thinking they can’t have any other. Author James Altucher talks about writing ten fresh ideas every day. This helps entrepreneurs have more ideas to work on; thus, they don’t get paralyzed only by one thought.
- Even before market testing, ask yourself, “Is this idea solving any problem/s?” If yes, go for market testing. If not, stop then and there and pick something up from your other entrepreneurship ideas.
2. No/Less research
It’s a common pitfall of entrepreneurship. You can call it the twin sister of our earlier point. You get so caught up in one idea because you don’t do enough research. No, it’s not wrong to make an obsession. You only need to ensure that the focus is being created after knowing enough that you can scale the idea. Not every idea is scalable. You need to realize this and do your research. Follow the tips below to prevent this dangerous pitfall.
- If you’ve some funds, you can ask a market research company to research for you. But if you’re new, you can do that yourself. This research is not only about sitting in a chair and searching on the internet. Instead, you need to go out in the market, use a questionnaire and talk to the vendors and customers about your idea. You can also talk to people who are experts in the domain if you’re new to entrepreneurship.
- Take your time to go for market testing. Do market research first, and then only go for market testing! Without enough research, the chances of failure are more. Be patient and keep on working on your idea. Entrepreneurship is all about finding sweet spots. If you get any sweet spot between the customers’ expectations and the problem/s you would like to solve, you can do the market testing.
3. Not working enough on yourself.
Entrepreneurship is not a contest; it’s a skill one should develop. The worst thing is when you join the excitement of building something with your bare hands, you forget the most important person, yourself.
In entrepreneurship, this happens because of the earlier reason for getting caught up in an idea. You get so caught up in one idea that you forget that you need to work on yourself first to execute it flawlessly. People don’t do what you tell them; people do what they see in you.
If you don’t work on yourself, don’t read, don’t learn every day, don’t make tweaks to your conceptualizations and fundamentals, don’t delve into your core values often, and don’t introspect, you will gradually lose your value. When you lose your value, you will lose your market, whether you like it or not.
Make it a priority now to work on yourself. Even if you’re experienced in entrepreneurship, take time away from your busy work schedule, read a book, learn a thing, and train for a new skill. If you know better, you will think better. If you think wisely, you will do something beneficial for your business and life.
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4. No planning and no goals to act upon
Before entering the entrepreneurship world, we live a life in a default mode. But entrepreneurship is entirely a different ball game. First of all, you need to have a plan. Even a vague plan is better than no plan. But most entrepreneurs fail even to understand the benefit of planning. It’s said that you plan to fail if you fail to plan. For entrepreneurship, this is a hundred percent correct. Planning for each move of yours is necessary. You cannot just react to market changes and leave things as they come. Strategizing, understanding the market, and proactively planning your success would be best. If not, you will prepare to fail.
Another sub-pitfall of an entrepreneur is being unable to execute the plan flawlessly. If you plan vaguely, why not do it well? If you do your project well and proactively, you can assign the work and responsibilities timely and work on the things only you can handle. That way, the execution will also be excellent, and the vision you’ve seen for your business will become true.
The best way is to plan 5-10 years ahead and constantly change your plans according to market changes and economic trends. But remember, while changing your dreams and trying to execute them flawlessly, don’t lose your core values. Your core values are the foundations upon which your entire organization stands.
5. Making your indispensable in entrepreneurship
Once you’re a few years old in entrepreneurship, you try to take care of everything. It’s somehow like a relationship. After a few years of commitment, entrepreneurship becomes your habit, and you want to take charge of everything. Thus what once started in 12-13 hours a day becomes 17-18 hours a day! Naturally, if you try to become everything to everyone, then it would be impossible for you to have time for your personal life. If your personal life is affected by your business, you will ultimately be a victim of business rather than a beautiful product.
The idea is to let go of most of the things in your business to concentrate on the things that you do best or generate most of the revenues for your business. Derek Sivers of CD Baby did that while trying to take care of everything. At that time, he realized he could concentrate only on creating codes for his business by delegating everything else to other people in the company. Leadership guru Robin Sharma did that as well. He left the CEO’s place to concentrate more on what he does best – writing, speaking, and inspiring millions of people.
So, never become indispensable to your business; choose the few things you do best and delegate or outsource the rest.
6. Too much growth too soon
Growth is not the problem in entrepreneurship, but too much growth too soon is. Why? In a minute, we will explain, but before that, let’s look at one of the worst things in entrepreneurship. When people start something on their own, they forget everything else. They work day and night, and they only think about one thing– big, big. And thus, they hire too many employees too soon, start too many projects in a few months and fall into traps. Their big wishful thinking requires them to invest too much money that they don’t have, and as a result, they become bankrupt very soon after starting things up.
Serial entrepreneur Rob Walling suggests an excellent alternative for this pitfall of entrepreneurship. He says – ‘Instead of going for growth, go for profits.’ If your concern is too much about growth, you will have a more extensive organization but a lesser profit. Do this instead – have a small organization and huge profits.
7. Taking the customers for granted
If you visit a newly open restaurant, you will see that you will be treated like a king when you arrive. You would feel like visiting there quite often and eating. The food quality is also excellent. But to take it as an example, visit after that some months. You will see that the customers are treated like ordinary people, the food has become sloppy, and they only care about money, not customer satisfaction.
In entrepreneurship, this is one of the most significant pitfalls. It’s said – Nothing fails like success. If, as an entrepreneur, you succeed and get some great customers in the beginning, don’t take them for granted later on. Make all the effort to offer them maximum satisfaction. To make your enterprise sustainable, you must ensure your customers are treated and satisfied. Otherwise, no matter how many years of entrepreneurship experience, you provide your failure soon enough.
Imagine this – Who would you be without your customers?
Now you know why the customer-centric business approach is vital to any entrepreneurship.
8. Undervaluing your products and services
No business can stand in the vacuum. It would help if you had the infrastructure for it. And to build the infrastructure, you need to bear a reasonable cost. By taking that reasonable cost, you create your products and services. Now you price your products and services and sell them in the market.
Most entrepreneurs price their products and services too low to achieve cost leadership, but the revenue often doesn’t even recoup the cost, and thus the enterprise suffers.
So what to do to price your products and services perfectly?
Add up all the costs, wages, and salaries, and add a little profit. Then divide by the number of products you’ve produced in the first lot. That would be the price of the product.
Entrepreneurship is all about common sense; you can become an entrepreneur if you have it.
9. No/less marketing
Marketing is the blood of entrepreneurship. If you don’t know that there’s even a need to market your products or services, then maybe you don’t need to start at all in the first place. Many entrepreneurs think that they don’t need to bear marketing costs if their products and services are good enough. But is it true?
If you look at giant companies, you will see they’re still marketing a lot more, even though they are becoming market leaders. They’re doing press releases, going for sales campaigns and promotions, sponsoring advertisements, writing blogs about their products and services, doing celebrity endorsements, and a million things. You may not have that sort of budget. But whatever budget you do have, you need to market yourself. Spiritual guru Osho has a great quote – If I don’t scream about what I can offer, how would you know? Same with you! People won’t see if you don’t scream what you offer.
10. Not taking the assistance of others.
It would help if you had a mentor. When you begin your entrepreneurship journey, you need someone who can help you with your vision and guide you through how you should approach your business. Many people don’t realize they cannot know everything when starting out. To accelerate their growth, they need an experienced person who has already trodden the path before them and can show how to take charge of their businesses exactly.
If you’re making a mistake now, correct it immediately. Talk to someone you know who had traveled this path before you and knew things better than you. Pay a fee to the person if you have to. But don’t make the mistake of trying to figure everything out yourself!
These are the most common pitfalls of entrepreneurship. But there are many. As you become more experienced, you will learn better. But if you’re new to entrepreneurship or have a few years in this field, don’t make the above mistakes. They might turn out to be very dangerous for your career and the overall well-being of your business.
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