When someone starts a business, their passion to make their business the next big thing is endless. Of course, every business owner wants their business to be the best, but it’s simply not possible without learning from your mistakes. In fact, most new businesses will fail. The reason for their failure is not always a bad product or idea. At times, even the best products fail because of mistakes along the way.
We talked to Daniel Pessin, the CEO of Digital Mind Inc., about some of these mistakes and he was open to offering his advice. His years of management experience and entrepreneurial lifestyle has taught him about the good, the bad, and the ugly of the business world.
Daniel Pessin Common Mistakes Why Businesses Fail
1. Not Knowing Your Target Market
One of the biggest challenges when starting a new business is being able to identify your target market.It doesn’t matter how unique and incredible your product or service is. You might even have the best product in the world. But if you don’t know your target customer or how to reach them, you’re doomed. You can’t sell a product if you don’t have customers who need it. Using research, marketing surveys,and analysis, you can properly identify and reach your target customer.
2. Procrastinating for Perfection
Pursuit of perfection is a mistake that does not even seem like a mistake to many startup owners. Don’t wait for your product to be perfect before you start getting it out there.Your product will never be perfect. The timing will never be perfect. Try not to think about your product as “perfect” or “done.” Instead, think of your product as something you are always working onand trying to improve over time. The best way to learn and improve is simply with trial and error. Make your product available to the market and start getting feedback. Listen to what people say. Make sure you have a feedback loop like a survey or questionnaire so you can make improvements.
3. Lack of Funding
Funding is a serious matter. A lot of entrepreneurshave the misconception that they only need funding to get their product off that ground. But what about the cost of marketing? What about the cost of operations? A business can’t survive without cash. There is nothing wrong with bootstrapping a business with your own funds if you have the disposable income to do it.However, if you don’t, you need to look for alternative options to make sure your business has enough funds to survive. Don’t think your options are limited to just getting a loan from a bank or friends and family.Thanks to the Internet, there are more options than ever.For example, crowdfunding is a big one. Sites like Kickstarter make it possibleto get the funding you need and it raises awareness for your product at the same time. Also, there are many alternative small business-funding solutions online from private companies.
4. Having the Wrong Team
Building the right team is critical for your success. You don’t want to hire people with the sole purpose to complete a task. You want to hire people who share the same vision as you do for your product. Someone who is willing to think outside the box and add real value by having ideas and questioning things. Make sure your team shares the same passion as you do for your product and always encourage creativity and free thinking.
5. Not having a “Plan B”
Of course you always want to have a positive mindset and hope for the best, but it’s veryimportant to consider worst-case scenarios. Considering negative outcomes will help you prepare and plan for issues before they happen. You should always have alternative solutions ready in case something doesn’t go according to plan because in business,nothing evergoes 100% according to plan. Keep yourself and your business flexible and be willing to adapt to new things. If you had a marketing idea and thought it would work, but it didn’t, no big deal, move on. It’s ok to test new things with trial and error and it’s ok to be wrong. It’s ok to change your mind.
Creating a new business comes with a lot of different risk factors. Try your best to avoid these common mistakes and good luck with your business!
The following answers were given by Daniel Pessin in regards to common mistakes business owners make when starting a new business.