Young people are known to be extremely creative and energetic. Many of them have a unique ability to recognise a need in the society and create a business opportunity to meet that need in a stimulating way. Indeed the world is in need of young, energetic and innovative entrepreneurs. These young people have the determination, drive and motivation to create and sustain some very unique businesses. Positive energy of this kind can be a great benefit to the economy of any particular country.
As young people venture into entrepreneurship, they need proper guidance, especially from those who are already in business. Many young people go into business without seeking proper advice first. This results in terrible losses and sometimes also results in the entire failure of the business.
Listed below are 9 common mistakes that these young entrepreneurs tend to make when venturing into business:
1. Lack of passion
Many young people tend to look for a line of business where they feel they will make plenty of money. They research for where they can get the highest returns, and they delve into these areas of business. In some cases, they often do not have passion for the particular area. Therefore, it becomes especially difficult for them to overcome challenges in the business when they do come or to even find out more about the topic. They may easily give up on the business at the very first sight of failure because there was no passion for it in the first place. Passion is an extremely important consideration when choosing which line of business to pursue. Passion is the driving force that will give one the energy to continue with the business even in times of crisis.
2. Lack of vision
Many times a young person will begin a business with no clear direction of what he or she wants the business to achieve, or who the target market should be, or where the business should be in terms of performance within a certain number of years. Without vision, the business is bound to fail sooner rather than later. Vision gives focus and a sense of direction to the entrepreneur and also to his or her employees. The owner of the business should write down a clear vision of what the business is intended to achieve. He or she should share this vision with the employees so that they all work as a team to achieve the vision given. Research has shown that people work better together when they have a common goal.
3. No proper business plan
Very few young people actually come up with a comprehensive business plan. A comprehensive business plan should include all the details of where to obtain funds to start the business and how exactly will the money be used. As the saying goes, those who fail to plan, plan to fail. This is true about not having a clearly written business plan. The plan helps to avoid any misuse of start-up funds, and it also promotes speed and efficiency when setting up the business. Time is extremely important when doing businesses. Markets are always changing and competitors are always adapting. Generally, a young person who has a business plan will be taken more seriously by investors which means that they may be able to raise more funds or attain better assets.
4. Wrong priorities
One common mistake that young people make is that they start a business with the main aim of making money only. This cannot sustain the business in the long-term, especially when challenges arise. If the main aim is to make money, then the quality of service to customers could easily be compromised in cases where the delivery of a higher quality product will reduce profits. This will be the beginning of the end of such a business, because the customers are the most prized asset of any business, and without a good customer base, no business can remain in operation.
5. Lack of patience
There is no business that became successful overnight. In fact, almost all successful businesses have a long history of ups and downs before they began to enjoy real success. Some good examples are Apple, FedEx, Reddit, Pandora and SpaceX. These businesses did not do very well in the first few years but managed to grow into such successful companies after time and effort. Most young people expect what can be termed as “microwave” success. They start a business believing that money will begin to come in immediately, and in huge amounts. When this does not happen, they begin to think of closing the business at a very early stage. The truth is that it takes a very long time for most new businesses to breakeven financially. Profits usually come in much later and all successful business people have learnt the secret of patience.
6. Lack of focus
Some young people tend to feel that if they start several businesses at the same time, they will be more successful. However, this is not the case. As a matter of fact, the contrary is true. Starting many businesses simply means that the entrepreneur will be unable to fully focus on one particular line of business and make it profitable. There will be a lack of full commitment to either of the businesses, and the end result could actually be the collapse of all them. It is advisable to choose a specific area of business and focus on it as this will give it a greater possibility of success.
7. Lack of sufficient marketing
Some young people spend a lot of time developing their product, but they do not put as much time and effort into marketing. They tend to underestimate the power of marketing. Budget allocation to the marketing department is usually one of the lowest in the entire business plan. A product may not be sold aggressively unless it is advertised sufficiently, and this is especially true if it is a new product. The amount of energy put into developing the product should be the same energy used for creative marketing. The good news is that the cost of marketing has lowered significantly in recent years with the introduction of social media platforms. Facebook and Instagram are popular platforms for advertisements. Aggressive marketing is usually needed when a company is in its initial stages, so as to raise awareness of the product and educate customers on the benefits and uses of it.
8. No proper research done on competitors
Some young people are not aware of the number of competitors who also have a product similar to theirs in the market. They may actually be totally ignorant of what the competitors around them are offering, and at what prices. If a product is simply introduced into the market without any research done on the competitor products, then there is a possibility of having very low sales. It is advisable for entrepreneurs to find out how they can improve on what the competitor is offering, so as to grow their own customer base.
In truth, competition research is important for all entrepreneurs. With the fast changes in technology, tastes and preferences, needs of consumers are changing rapidly and it is important for entrepreneurs to catch quickly. A good example would be when the new young telco Circles.Life introduced SIM Only Plans with huge data offerings to suit the needs of consumers. Many consumers changed their mobile provider to Circles.Life. Older companies such as Singtel, M1 and Starhub only started releasing their own SIM Only Plans after seeing the fall in subscribers. This caused them to lose a significant number of users to their competitors. As mentioned in a price and data review of best SIM only plans. In order to achieve business success, entrepreneurs must always be on the lookout for opportunities, be aware of trends and what competitors are researching on.
9. No networking
It has been said that no man is an island, and this is especially true in business. Young people tend to want to handle everything on their own in their new businesses. This is, however, not advisable. The owner of the business should delegate some work to experts who will do a thorough job. There should also be networking with seasoned business people, and at this point, the entrepreneur should get a mentor who will give them advice regularly. This networking will help the business owner to focus on the more important areas of the business, hence leading to growth.
Young entrepreneurs should take note of the above points when setting up their business and endeavour to learn from those who have gone ahead of them. This will be a great advantage as it can actually help them to avoid some obvious pitfalls in the initial stages and increase their chances of success.