Advice for entrepreneurs taking their first steps

Starting a new business is an exciting and challenging journey. As a new entrepreneur, you will be faced with many decisions, challenges, and opportunities. However, it's not uncommon for first-time entrepreneurs to make rookie mistakes that can hurt their business. In this article, we'll explore common rookie mistakes and strategies on how to avoid them, to help make your journey as an entrepreneur smoother and more successful.

Not Conducting Enough Market Research

One of the most common mistakes made by new entrepreneurs is not conducting enough market research. It's essential to research your target market, your competition, and the trends in your industry. This information can help you create a business plan that is tailored to your specific market and can help you avoid costly mistakes down the road.

To avoid this mistake, spend time researching your market, talking to potential customers, and analyzing your competition. Use this information to refine your business plan and ensure that your product or service meets the needs of your target market.

Mistake #1: Lack of Market Research

One of the biggest mistakes that new entrepreneurs make is not conducting proper market research. Without understanding the market, it’s difficult to develop a product or service that meets the needs of potential customers. Market research involves identifying the target audience, analyzing competitors, and determining the demand for your product or service.

Strategy: Conduct thorough market research before launching your business. This can include online research, surveys, and focus groups. Once you have a good understanding of the market, you can use the information to refine your product or service and develop a marketing strategy.

Not Having a Clear Business Plan

Another common mistake made by new entrepreneurs is not having a clear business plan. A business plan outlines your goals, strategies, and tactics for achieving success. Without a clear plan, it's easy to lose focus and direction.

To avoid this mistake, create a detailed business plan that outlines your goals, strategies, and tactics. Make sure your plan includes financial projections, marketing strategies, and a timeline for achieving your goals.

Mistake #2: Poor Financial Management

Many new entrepreneurs struggle with financial management, including underestimating start-up costs, not keeping accurate records, and failing to plan for unexpected expenses. Poor financial management can lead to cash flow problems, debt, and even bankruptcy.

Strategy: Develop a realistic budget and financial plan. Consider all costs associated with starting and running your business, including equipment, inventory, rent, utilities, and marketing expenses. Keep accurate records and regularly review your financial statements to monitor your cash flow and make adjustments as needed.

Not Having Enough Funding

Starting a business requires capital, and many new entrepreneurs underestimate the amount of funding they need. Without enough funding, it's challenging to get your business off the ground and grow it.

To avoid this mistake, create a realistic budget that includes all of your startup costs, such as equipment, inventory, and marketing expenses. Consider applying for loans, grants, or other forms of funding to help finance your business.

Not Focusing on Customer Acquisition

Many new entrepreneurs focus on product development and forget about customer acquisition. Without customers, your business will struggle to survive.

To avoid this mistake, make customer acquisition a priority. Develop marketing strategies that target your ideal customer, and focus on building relationships with your customers to keep them coming back.

Mistake #5: Overreliance on a Single Customer or Client

Relying too heavily on a single customer or client can be risky. If that customer or client decides to take their business elsewhere, it can have a significant impact on your revenue and profitability

Not Having a Support Network

Entrepreneurship can be a lonely journey, and many new entrepreneurs underestimate the importance of having a support network. Having a mentor or advisor can provide valuable guidance and support as you navigate the challenges of starting a business.

To avoid this mistake, seek out mentors and advisors who can provide guidance and support. Join networking groups, attend industry events, and connect with other entrepreneurs to build your support network.

Mistake #3: Not Building a Strong Team

Another common mistake is not building a strong team. Many first-time entrepreneurs try to do everything themselves or hire friends and family members without considering their skills and experience.

Strategy: Hire the right people for the job. Look for individuals with experience and skills that complement your own. Consider outsourcing tasks that you don’t have the expertise for. Develop a strong company culture and invest in training and development for your team.

Not Being Flexible

Starting a business requires flexibility, and many new entrepreneurs struggle to adapt to changing circumstances. It's essential to be open to new ideas, feedback, and opportunities.

To avoid this mistake, be willing to pivot your business strategy if necessary. Be open to feedback from customers, employees, and advisors.

Mistake #4: Failing to Adapt to Change

Businesses are constantly evolving, and new entrepreneurs must be willing to adapt to changes in the market, technology, and consumer preferences. Failing to adapt can lead to missed opportunities and decreased competitiveness.

Strategy: Stay informed about industry trends and changes. Be open to new ideas and be willing to make changes to your business model as needed. Build a culture of innovation and encourage your team to share their ideas and suggestions.

Bullying for love...

Once upon a time I worked for a company who released an HR policy on bullying. Part of that policy claimed that bullying was in the "eye of the beholder" - i.e. if you felt it was bullying, it was. 

My reaction at the was one of slight incredulity - how on Earth could such a thing either be provable or enforceable. Policies without teeth are surely pointless?

Many years on I actually see the point and I actually disagree with my former self. Perhaps I'm older and wiser and understand human nature a bit better.

Perhaps I thought that bullying was always something physical. Perhaps I thought it had to involve coercion. Perhaps I thought that the bully always got their own way. I don't believe any of that now. 

For starters, bullying is most definitely in the eye of the beholder: different people respond differently to being subjected to the same behaviours. 

The confident employee who is pal-y with the boss may take jibes, swearing, back-slapping, throwing of objects (lightheartedly or otherwise) and unreasonable demands with a pinch of salt. A less-confident employee may, on the other hand, take such things very much more personally. It might affect their work and their ability to feel open. It might further harm their confidence. It might make them start to fear engaging with their boss. If it gets to that point, then actually whether you label it "bullying" or not, it's a problem - it's "inappropriate behaviour".

Which begs the question - what is bullying? 

Is it physical? is it coercive? Is it about someone else getting their own way?

It can be all of things, but it doesn't have to be. 

For example, inaction can be as damaging as action. Blanking or ignoring someone can be damaging and controlling. Busting a gut to produce a great piece of work, only to be met with silence and blankness can obviously be hurtful. If this is directed discriminately at specific individuals or is part of an ongoing pattern, even more devasting. This type of behaviour is sending psychological signals to an individual - controlling them in a subtle way - in my book, bullying.

The same is true of an explosive temper. (Interesting word "temper", also meaning "make more temperate, acceptable, or suitable by adding something else; moderate; "she tempered her criticism")  Of course all humans have in in-built anger mechanism and have times when this needs to be released. What we try to do is ensure that in the workplace, at least, this is - if you pardon the pun - tempered. If it is not, then it can create a culture of fear. If employees' actions or mistakes are met with colleagues' explosive rage then, again, this is essentially a psycholigical tactic to control another employee's actions - whether or not that tactic is done consciously or unconsciously, spontaneously or in a considered way.

Probably most people agree that rage and anger and temper and other 'destructive' emotions certainly have the potential to cross that line in the sand that separates "enthusastic personality" and "someone who gets things done" from "bully" and "tyrant"; and different people will draw different lines. But the conundrum for me is that I also think bullying can be done in a spirit of generousity and love. Yes, really.

I argue that any kind of controlling behaviour is a form of bullying. It doesn't matter what the motivation for that behaviour is - when one person tries to systematically control the actions or desires of another, it's bullying.

You see this sometimes happen in families. Take, for example, the person who always insists on paying for meals out. Always. On the surface it's an act of kindness and generousity. But what this behaviour does is deny anyone else the same privilege. It denies anyone else the same expression of kindness or generousity towards their family. IT DENIES ANYONE ELSE THE SAME. 

It turns out then, that this behaviour, when performed relentlessly, is selfish - even though it is driven by generous motives. Now that's wierd. 

That's why bullying IS in the eye of the beholder - because it's about the EFFECT of behaviours. It has less to do with an absolute value judgement of the behaviour of the bully, and whether their actions are well-intended and apparently harmless.  

Well - food for thought (am I'm not paying). 

There are two ways to save money...

There are two ways to save money without undermining what you do: reduce cost and cut wastage.

When I recently invested in my bread machine I thought I was probably doing the former - reducing cost - because I anticipated the price of raw ingredients to be much less than the price of the finished product (a loaf of bread). 

It turns out this assumption is not as starkly true as I had hoped. Sure - there is a lower price point for raw ingredients, but it's more marginal than I had imagined. Silly me for not doing my ROI (return on investment) calculations based on more detailed research/discovery.

Notwithstanding, my bread machine is still saving me loads. How?

Because, for one, it's cutting down wastage. The ability to make my bread "on demand", to make the appropriate quantities I need, AND the ability to store the ingredients until they are needed (rather than keep unused bread until it is mouldy) means my purchasing and consumption patterns are much more closely aligned. I'm putting less into the system, but still getting what I need out. And it's fresher - i.e. better quality. In a sense, my process is more lean.

But there's a third factor two - possibly even the most significant - that is contributing to my results: transformation.

That's right - I have transformed my behaviour. And this is the third way to cut costs - by changing what you do.

In the case of the bread maker, my behaviour has changed so that I eat more bread, more often. This change in behaviour translates into less eating of other, more costly, foodstuffs (such as snacks and ready meals). And that is where the significant savings come. If I can feed myself on bread and soup for a day, it'll cost me, say £2 - when I might otherwise have spent £5 or £10 on alternatives (TV dinners, take aways, or even home-cooked meat & two-veg). The effect of transformation is stark. 

And this is how it applies in business too - technology is an enabler. It may slice a bit of cost off here, enable a slightly more efficient process there - but ultimately, it's by transformation - change in behaviour - that the big bucks can be saved. 

So there you go - the essence of business process transformation in a nutshell - or indeed, a bread machine.

Stigma still very much in evidence at Management Today

Given the recent high-profile campaign by ReThink, I was saddened, disappointed and perhaps even slightly disgusted to read an article in management today that demonstrates - with textbook accuracy - the prejudice and stigma towards mental health issues that still exist today. It's not clear whether it is the result of ignorance or arrogance on the part of the author, in an attempt to be humourous - but for me, it doesn't work. It's embarassing. It's a publication that you think could do better.

The article is a commentary on a BT Tradespace survey that suggests Stephen Fry would be the small businesses'  dream employee. Unfortunately Management Today doesn't show the same insight and understanding as those small business, as it goes on to say:

But Fry has managed to trump them all, and by some distance too. Our only alarm is that – judging by his much-publicised walk-out from the West End a few years ago – he doesn’t have a great track record for dealing with pressure.

False Alarm. Whatever judgement is being exercised here, it is wrong. Fry's "much-publicised walk-out" was not a failure to deal with pressure - but by his own frank and moving admission, a result of a deeply dark period manifesting from his bi-polar disorder. Bi-polar is an illness, a malfunction - like a broken leg -  not a character weakness, as the author implies. Hey, but never let the facts get in the way of a good story?

In fact, anyone following Fry's life in detail through his twitter "tweets" will be staggered at the man's ability to cram twice as much as the rest of us into his day - not only responding to the thousands of followers who "tweet" to him daily, but jet-setting left, right and centre between TV sets, riding stubborn mules up mexican mountains, amidst writing and recording and everything else he does. The man is an inspiration.

Thankfully UK small businesses seem to recognise this - while the hand that feeds them - Management Today - should know better.