Failure is an inevitable part of life, and many entrepreneurs are all too familiar with it. The path to becoming an entrepreneur is inherently full of pitfalls, setbacks, and roadblocks. Not everyone is going to make it, and not every business is going to come out on top.
However, the possibility of failure is not a good enough deterrent for you to start your journey into entrepreneurship. Skills and experience are already prerequisites, but knowing the risks also makes a huge difference in your chances of success. That said, let’s talk about some of the most common reasons many young entrepreneurs fail, and what they could have done differently.
1. Poorly developed product or service
Regardless of the industry you’re trying to enter—whether it’s something big like the promotional products industry or something with a smaller niche—no one is going to buy from you if your products or services are poorly developed. A lot of first-time entrepreneurs think that they’ve come up with the next best thing on the market, but in reality, they need to spend more time on development.
We get it—your product is unique and could make breakthroughs in the industry. However, unless what you have is truly a unicorn product, you need to ensure that it goes through rigorous development before revealing it to the market. Too many entrepreneurs launch with half-baked ideas; don’t become one of them.
2. Neglecting the revenue model
You have to figure out how to monetize yourself before anything else. It’s one of the most important parts of your business plan—and without a solid business plan, is it really a business or just a hobby? When entrepreneurs neglect the revenue model, they are essentially entering the market with little to no idea on how to actually make money.
To avoid making the same mistake, reach out to seasoned investors and successful entrepreneurs. They can help you figure out how to generate cash flow and avoid the pitfalls that may come your way in terms of financials. There are many people out there who want to see young entrepreneurs rise, you just have to find them and ask for help.
3. Quitting the 9-5
If you ask young entrepreneurs today about why they want to start a business, many will say that it’s because they want to achieve financial freedom—which is another way of saying that they want to quit their 9-5. However, unless you have a good financial safety net to catch you if you fail, quitting your day job right away may not be the best idea.
Without a stable source of income, you are more likely to end up in a tight financial spot in case of unexpected expenses that may arise in your business. Even if you have a large capital, that can quickly run out if you don’t have healthy cash flow. Sticking with your day job until you gain enough traction to quit is a much better alternative in this case, especially if failure has a good chance of putting you in the red.
4. Lack of experience
Experience is the best teacher, and this statement cannot be truer in the world of business. Unfortunately, you cannot do much about lack of experience except to start gaining it. However, you can make up for your lack of real-world experience with knowledge.
Learn from others’ mistakes, especially from business owners who have already made a name for themselves. Their failures and mistakes made them who they are today, so, while you don’t have much to show for experience, use their experiences to increase your knowledge and avoid making the mistakes they made.
5. Doing everything yourself
Many young entrepreneurs have this superhero mindset wherein they think that they can do everything themselves. While going solo may work for a micro-business, you need to have more hands on deck if you want to grow. Furthermore, a big part of entrepreneurship is about trusting and empowering other people as you go along, which is also why you need to be extra picky about the first few people you take on board.
Even after you already have a team, you still need to recognize when you need additional help. Now, this doesn’t mean you have to hire a new person every time you need an extra set of hands—there are other ways you can find labor without hiring new people, outsourcing being one of them.
Hopefully, this article opens your eyes to the realities of being an entrepreneur. It’s not going to be easy, but it’s not going to be impossible either. As long as you have a solid business plan, the right mindset, and a good amount of drive, you will survive.