Fatal mistakes of entrepreneurs

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The desire to rent a room at the lowest price

Many aspiring entrepreneurs think that in order for a business to flourish, it is necessary to strive to reduce costs as much as possible. It’s a delusion. You need to be able to correctly prioritize and understand where you can save, and where such savings can be fatal.

If renting more expensive premises (for an office or for placing equipment for production) will bring any advantages, then you should definitely do it.

Hiring your friends and relatives

When you first start your own business, especially if it is the first, it is always difficult to let strangers into your business and immediately start trusting them. In this regard, many make a big mistake — they hire their relatives, friends and acquaintances to work in their company, arguing that «I know these people well, trust them, and they will not let them down.»

Fatal mistakes of entrepreneurs

In some cases, this strategy may work for you. However, more often it happens otherwise, and after a while you already begin to regret that the accountant in your company is your aunt, and the sales manager is a close friend. First, by giving preference to friends and relatives as your employees, you are depriving yourself of the opportunity to hire really professional people who could bring much more value to your business.

Setting low prices for services or products

Most often, this is done in pursuit of a large number of customers and reason like this: «I will put a small price on my services or products, and customers will immediately tumble down to me.» Customers may even fail (although this is far from a fact, as the unreasonably low price raises doubts about the quality of the goods), however, with such a strategy, your business risks becoming bankrupt.

When setting pricing policies, consider the fact that you will need to pay wages to employees, maintain equipment operability (repairs, replacement), pay rent, etc. Adequately assess the value of your product, and deliberately understate it — the lot of inexperienced and not very smart entrepreneurs.

Refusal of the services of professionals and neglect of advice

Do not rejoice if you were able to hire an accountant or a lawyer who requested low wages. As a rule, you are unlikely to wait for professional work from such an employee, and subsequently he will simply “sink” your business. The knowledge and skills possessed by true professionals should be paid accordingly.

Fatal mistakes of entrepreneurs

Collapse of the advertising campaign, which did not give instant profit

However, it is not always worth waiting for an instant result from a promotional event. You may have several clients in the very first days since the start of the advertising campaign, and in a month / half a year / year — an entire customer base will appear.

Excessive generosity towards employees
Your employees should be treated fairly — this is correct. But what is justice? If you recruited an employee who already in the first month does not cope with his duties, which will be more fair: dismiss him or give another chance, because he has not yet had time to show himself, and he has small children and a car loan ?

A noble attitude towards people is fine, but why should you turn other people’s problems (in this case, an employee’s problem is a lack of knowledge and skills) into your own problems?

Non-recognition of own mistakes

Perhaps the biggest and most unforgivable mistake of entrepreneurs is that they do not know how to learn from their mistakes. As one experienced businessman said, “in sports, you are a student no more than a year, and in business you have been a student all your life.” You should not assume that having turned quite a bit in the business environment, you already know everything and know how to do everything. Continuous improvement of yourself and your company is an indispensable condition of a successful businessman.

Source: dengodel

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