The most common mistakes entrepreneurs make

Take the number of businesses in the world and multiply it by a million. The number you get is the number of possible business mistakes you can make throughout your entrepreneurial journey.

Nevertheless, there are several small business mistakes that almost every entrepreneur has made. Play it smart and learn how to avoid the biggest mistakes entrepreneurs make before committing them.

Not having professionally drafted contracts

When I started running my business, I undertook various projects after a verbal go-ahead – one of the biggest business mistakes I could’ve made if you ask me. I would execute my design and branding work and send off my designs to the clients. When it came to paying my invoice, some clients did not pay! 

Once they had the work they needed, they did not respond to my demand for payment. They even ignored my emails and calls. I quickly learned to have a professionally drafted contract in place and ask for a 50% payment upfront and the 50% balance before handing over my files and artwork. These agreements need to be in place to avoid nasty surprises.

Vaishali Shah, Owner of Creative-ID & Ananya Cards

Not having your own niche/path

I spent almost the first 4 years of my business agreeing to everything and marketing to everyone. Ultimately, I ended up taking on cakes that I didn’t like, didn’t charge appropriately for, and resented. However, I realized this was one of the worst and biggest business mistakes entrepreneurs make. 

Hence over the last 12-18 months, I have worked hard on finding my niche, the designs that really make me feel happy. The result has been I am now attracting my ideal clients who love my designs and am becoming known for my particular style. I suppose it was a right of passage but I wish I had found my niche sooner.

Debbie Gillespie, Owner of Debbie Gillespie Cake Design

Not seeking professional employment advice

In the early days of business, I hired my first member of the team and failed to consider looking into the necessary paperwork and contract in order to protect myself and my business if in the future I needed to make any changes to their position in the company. 

Having learned the hard way that this was not ideal and caused much stress, I’d say of all the small business mistakes I’ve made this is one of the worst.

But the outcome is now I am very vigilant when it comes to entering into partnerships or agreements with anyone and I always have the correct paperwork. If I am unclear in an area that I know needs a contract, I know to consult a legal expert to ask for guidance. 

Bernadette Chapman, Owner of Bernadette Chapman Consultancy

Doubting myself and my abilities

Over the years I have wasted far too much time double guessing myself, doubting my abilities, and comparing myself to other business owners. I would say this is mainly due to the significant rise we have seen over the past decade on social media where imposter syndrome really does sneak in. 

I have worked a lot on my mindset as a result and whilst I still have times where I wobble, I can now confidently tell myself. “I am good at what I do, I have nearly two decades of experience, a fantastic reputation, a leader in my field, and that I will no longer allow others to make me doubt myself”.

Bernadette Chapman

Not being a good communicator

I am a self-confessed control freak, so it has taken me a while to learn that I cannot do it all, I need to delegate in my business in order to grow. But with delegation comes the need to be able to communicate with those you are delegating to, what you expect, what you need doing, and when you need it done.

So I found for a while that the tasks being completed by those I was delegating to were not being completed in a way I had hoped. After a bit of reflection and looking back at situations, I can see it wasn’t necessarily anyone’s fault, it was more the fact I hadn’t communicated exactly what my expectations were. 

I am excellent at communicating with my clients but when it came to communicating with my team, I noticed the ‘niggles’ were actually due to my inability to accurately communicate. 

Having worked on this with a consultant, I can see that actually, the fear of not being in control was affecting my communication skills! If you need to communicate tasks with your team members, make sure you really are asking them what you truly are expecting in return!

Nicola Russill-Roy, Founder of Propose PR

Not getting a mentor as soon as I can

Most start-up business owners underestimate the importance of business mentors. Like me before, I didn’t see the value of someone guiding me or telling me what to do. I became too dependent on business courses, books, and a few entrepreneur friends assuming I got it all under control until I realized I didn’t.

Business mentors serve as another pair of eyes that looks after you and your business. They offer invaluable skills, wisdom, and experience that no secondary or tertiary sources could provide. They could identify pain points and suggest solutions that only seasoned business owners can navigate.

You can get endless benefits in getting a mentor, but one must be teachable and humble enough to admit that you need help and guidance. Once you do, they will be your vessels to success!

Ewen Finser, CEO of The Digital Merchant 

Micromanaging teams

As an entrepreneur, your company is frequently referred to as your baby. It’s difficult to relinquish control when the time comes to recruit a team since you’ve spent so much time and money on it. 

This can lead to entrepreneurs micromanaging their staff or attempting to keep too much control. Both are difficult to break and considered poor leadership qualities. Because you’re so invested in the company, you still have a lot of issues to deal with. You’re also the one who sets the tone and establishes a culture since anything you do will be followed by others.

Therefore, when it comes to recruiting people, I adopt a two-pronged approach. On the one hand, I hire individuals who can take over my monotonous duties, which I can easily delegate and oversee, and on the other hand, I attempt to hire people who have the expertise and experience to assist me in areas where I am weak.

This gives me more time to focus on the vital things while still providing me with the knowledge I need to build the firm.

Gerrid Smith, Founder of Corporate Investigation Consulting 

Taking funding out of desperation

Don’t take funding out of desperation. The best time to find investors is when you don’t need it. If you’re desperate you are much more likely to take a bad deal and sign with partners who aren’t a good fit. It is critical that you take the time to vet investors and find one that shares your vision and values. A bad investor can ruin a good company.

Ben Hodson, Co-founder, and CEO of JobNimbus

Lack of long term planning

Another one of the biggest mistakes entrepreneurs make is not building a business with the next owner in mind.  This oversight and lack of long-term planning leave them with an asset that has little to no value after their retirement.

Basic planning is almost free to create and just takes some time and planning. Things like written agreements with key stakeholders can be very low-cost to create and can help clarify each important relationship.  Making sure none of the relationships are dependent solely on the business owner is also a big part of making the business saleable in the future. 

This can involve working with customers as a team rather than one on one. An organized and clean set of tax returns along with professionally prepared financial statements will also be needed to properly value the business and make it saleable in the future.

David Jacobs, Business Broker with David Jacobs Business Broker 

Failing to conduct adequate research

Typical mistakes business owners make are failing to conduct adequate research about the industry in which they operate. Not conducting sufficient research to determine the viability of the business’s location and the company itself is detrimental.

Numerous start-ups fail to conduct adequate market research, and much more than that fail to survive. Market research can provide critical information on a product’s demand and pricing.

Emma Williams, Chief Research Officer at HIGH5

Thinking your product is so good it’ll sell itself

One of the most common mistakes entrepreneurs make is thinking a physical shop is the best way to start. We did that. Our organic spice company started as a store in a high-traffic area. We quickly learned that high traffic doesn’t instantly equate to people walking in and shopping and that the location is not good for our business. Hence, we closed the store after 2 years.

We needed to start smaller, take time to understand the market, and prove why our spices were superior. We shifted to farmer’s markets to talk to people about spices and cooking. We listened, learned, and then went 100% into online sales, which has proven to be very lucrative.

We get local requests to open a store, but knowing the industry now, we won’t do that. Instead, we made a custom spice vending machine to sit outside our factory so we offer in-person shopping (without expensive overhead) while we run our online operation at the same time.

Meaghan Thomas, Co-Owner and President at Pinch Spice Market  

Underestimating how long a task will take

The biggest mistake I’ve made is underestimating how long a task will take, and then bringing that estimation to the team. It’s often said that everything will take twice as long and cost twice as much as you expect it to. Turns out, that’s right. 

So when it comes to managing expectations and the motivation of your team, you never want to promise something you can’t guarantee. For example, don’t promise a reward on X date when a task is completed. 

Instead, promise a reward when the task is completed, as long as it’s done before X date + X date. In other words, double your timeline and don’t promise your people things you can’t guarantee.

Alex Lefkowitz, Founder of Tasty Edits

Not creating a brand from the start and merely setting up a business

I believe there is a big difference between ‘creating a brand’ and ‘setting up a business’ – the latter is what I did initially and saw me attracting the wrong client. 

When I set up I merely set up a blog, a company name, and documented my floristry work. I didn’t give too much thought to a brand, a sustainable business model or narrow down exactly who my ideal client was. As a result, early on I was attracting the wrong sort of clients. 

I re-branded a couple of years later and this is when my business truly elevated and I now get work from my dream ideal clients and I am getting the recognition I know I deserve and that I had hoped to achieve.

My lesson learned is to not rush into setting up a business, it’s not just about coming up with a cool business name, throwing up a website and randomly posting content, and hoping for the best.

Emma Soulsby, Owner of Emma Soulsby Flowers

Conclusion

There’ll always be mistakes entrepreneurs make and that’s not the end of the world. What matters is to recognize these business mistakes and minimize damage. Furthermore, small business mistakes are crucial to developing important leadership skills that will later help you upscale your business.