5 Mistakes New Entrepreneurs Make

5 Mistakes New Entrepreneurs Make

Are you an entrepreneur and have no idea what you’re doing? Many new entrepreneurs feel this way when starting their first business. When I started my first business in my twenties, I had no clue what I was doing. Throughout the years, I’ve learned from my mistakes and successes, leading me to become the successful entrepreneur I am today. To prevent you from making rookie mistakes, I’ve outlined the five mistakes new entrepreneurs make and how to avoid them.

#1 Not Being Financially Literate

Financial literacy is a fundamental concept every entrepreneur needs to become successful. These financial concepts include assets, liabilities, investing, return on investment (ROI), depreciation, taxes, revenue versus profit, capital, and debt. For example, let’s say you’re an entrepreneur who started a business and wants to purchase a new software program for building sales funnels, emails, and advertising. This software program is an asset because it would help you reach more customers, resulting in more revenue. In addition, you can calculate the ROI for the software to ensure it’s a good investment for your business. 

Financial literacy is critical for any entrepreneur because it helps them understand how money works and how to manage their finances. Without financial literacy, their business may go bankrupt.

The best way to learn financial literacy is to read books and watch videos about financial concepts. Studying complicated financial concepts isn’t fun, but it could be the difference between a thriving business and a bankrupt business.

#2 Thinking They Need to Know Everything

When you become an entrepreneur, there’s this burning desire to know everything about business and the world. However, you can’t know everything if you haven’t experienced anything. Some of the best lessons I’ve learned during my entrepreneurial journey were from my failures. Each failure taught me a valuable lesson that I’ve carried throughout my journey. So, remember that you don’t have to know everything; you just have to take action and learn as you go.

#3 Trying to Solve a Problem That Doesn’t Exist

You may have a brilliant idea for a business you think everyone will love. Then, you go to market your product or service and don’t make any sales. I see this happen all the time with new entrepreneurs. They think they have the perfect solution to a problem and try to sell it to the market. The issue is that the market didn’t know the problem existed, so there was no demand for your solution. Before trying to solve a problem on your own, look at the common issues or gaps in the market. Figure out the market’s pain points and devise a solution to that problem. The solution you create will already be in demand because you know people are searching for it.

#4 They Don’t Learn Sales Tactics

For some reason, people think that entrepreneurship and sales are two different things. However, entrepreneurship and sales play off each other to create the ultimate business duo. Entrepreneurship is developing a product or service to sell by starting a business. Sales is the ability to sell that product or service to potential customers. Knowing sales tactics such as persuasion, reciprocation, communication, and negotiation are the key ingredients to marketing your product or service. If you don’t know anything about sales or sales psychology, your business won’t last very long.

In addition to being fluent in sales, you should avoid “selling” your product or service to people. People don’t want to be sold to. They want their voices heard. So, by listening to potential customers and their pain points, you can make sales without selling a single thing.

Nike is an excellent example of a company that doesn’t “sell” its products to customers. Nike doesn’t tell everyone to buy their products; they show people what kind of lifestyle they could have by using Nike products. Nike is so successful because they sell an idea rather than their products. They want you to believe that their products will help you “Just Do It” no matter what.

#5 Not Developing Multiple Streams of Income

Many entrepreneurs think they just need one product or service to thrust them into wealth. However, just one business isn’t going to make you wealthy. Combining your business with various assets such as investments and passive income streams will make you rich. For example, you could have a blog that makes you a few hundred dollars a month. You could also own real estate properties that bring in consistent cash flow every month. My suggestion is not to stop once you’ve built your business. Keep adding as many income streams as possible so that if one of them fails, you have several others to provide income.

6 thoughts on “5 Mistakes New Entrepreneurs Make”

  1. Brian Wakefield

    Thanks that’s some good advice I’m thinking of going into business for myself starting with general contractor and electrical work just trying to find the right way to start

  2. Thank you Jeff!
    This is a wonderful breakdown of the reality of the focus points. I have spent the last 6 months on finetuning my financial litteracy and sales approaches but I have not actively been workjnv my business. I have been askjnv myself if I was waisting my time not just jumping in, but now I see that it was Vital to build a solid foundation to move forward.

  3. I sell insurance. I started with supplemental and then added health and then life and financial services. I was told to stick to one but I feel that if one is not bringing the income then another will bring it. I’m due time they can all be successful. It just might take me a little longer. TY for your agreement that we could or should have more than one business!

    1. Absolutely, Gregoria! Thanks for sharing your experience. Good things take time, and progress is happiness.

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