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Here’s an alarming fact for new entrepreneurs: more than 66% of all new businesses fail within their first eight years of operation. Fortunately, as a new business owner, you can reduce your risk of failure by avoiding the following five common mistakes that many new entrepreneurs make.
Related: 5 Things Not To Manage A Small Business
1. They don’t make the best use of their time.
When your day is not planned, you tend to react to others instead of creating or producing. For example, suppose you just opened an architectural firm and have a few projects in the works. To be paid, you must produce drawings, models and keep engineers and contractors on schedule.
But what if you don’t have a fixed plan on a given day? It would mean that you come to the office and react to every phone call you receive. In other words, you would be spending the whole day putting out fires and neglecting to spend time creating or producing the product you are selling – namely building plans.
It is a problem.
If this lasts long enough, you will fall behind on your production schedule and end up losing customers because of your inability to focus on and complete your projects. Instead of reacting all day, plan to resend emails or put out fires for a set number of hours per day. In addition, set aside a predetermined number of hours to focus on production or similar work that leads to finished products.
By doing so, you will prevent emergencies – perceived or not – from diverting your entire day of productivity.
2. They waste time on unimportant things.
A good rule of thumb to prevent you from making this mistake is to use the “So what?” Test.
For example, your business has 2,000 new Facebook subscribers in the past month. So what? What does this do for your business?
By evaluating problems like this, you can eliminate what is really profitable and what is not. Having followers on Facebook is great, but if you don’t convert at least some of those followers to leads, what good is it for you?
Related: Are You Ready to Race for a Business?
3. They avoid confrontation at all costs.
You want to be loved as an entrepreneur. It makes sense. However, when you focus on being loved at the expense of the health of your business, it becomes a problem.
When you are faced with bad employees who are not doing their jobs properly, bad business that simply does not benefit your bottom line or other similar scenarios, you have to step in and make tough decisions.
Remember, it’s not personal, it’s just a case.
4. They are too cautious for fear of failure.
Failure is a big part of success, so if you, as a business owner, try to prevent failure to the point of stopping growing your business, you are bound to fail.
The following quote is from an animated film, but is worth remembering. In Kung Fu Panda, master turtle Oogway says: “You often meet your fate on the road he takes to avoid it.”
This is very true if you think about it a little. If you never take risks with your business, you will never grow. If you do not grow, you will eventually stagnate and retreat. Then you will start to fail. So, as you can see by being so afraid of failure that you don’t improve or develop, you are doomed to failure after all.
5. They have no realistic estimate of their operating costs.
Before opening a business, you need to make sure you know how much income you need to keep afloat. This includes paying you.
Many new business owners forget this and only take into account the cost of rent, employee wages and utilities. It’s a good start, but if you don’t include your own salary in this figure, you will greatly underestimate the cost of running your business.
Owning your own business can be extremely beneficial. Respond to yourself and do what you love – that’s what everyone wants. However, being an entrepreneur can sometimes be difficult and difficult, but if you keep these five common mistakes in mind, you will give yourself a head start.