10 Silly Business Mistakes Entrepreneurs Make In The 2nd Year Of Business
The second year is when entrepreneurs start seeing how their business will work. It’s also when they start figuring out what they can do to improve the company’s trajectory. If you’re an entrepreneur in the second year of your business, you’re probably going through many changes. The good news is that the challenges will only get more critical as you grow your business.
Within the first 12 months of running your business, you made many decisions that led you to where you are today. However, the second year is when you start seeing the long-term effects of those actions.
Your company operates in a much different environment than when you first started. You’re now facing pressures from within your company and from outside forces. That’s why entrepreneurs usually make so many mistakes in their second year. It’s not about the errors per se. It’s about understanding why they happened and what you can do to avoid repeating them in the future.
Trying to Do It All
So many people want to do everything. EVERYTHING! They want to handle every aspect of their business, but they are overwhelmed and overworked. There’s no way to do it all because there’s too much to do, especially daily. You can be successful by surrounding yourself with the right people and delegating tasks you are not good at or don’t have time for. This will free you to focus on your strengths and grow your business.
Not Being Forthright
Entrepreneurs are often worried about competitors taking their ideas and running with them. So they keep their business under a veil of secrecy. This is a big mistake. You should be sharing your idea to get feedback and validation, as well as to gauge interest. Your business idea may seem significant to you, but not everyone will think it’s fantastic. It’s better to find out that your idea isn’t that great before you spend months or years trying to get it off the ground.
The best way to test an idea is to share it with people who know whether it’s good or not, such as customers you’d sell the product or service to or potential investors in the business.
Having No Clear Marketing Strategy
It may seem obvious, but many businesses fail because they do not know how to market themselves properly. Your marketing strategy is critical to your success as a business. It is essential to be clear on your key messages and brand values and outline what makes you different from others in the same industry. Many companies make the mistake of waiting until it is too late, so having a clear marketing strategy that you can stick to is essential.
Ignoring Your Customers
Happy customers are essential for long-term success, so keeping them happy and loyal is necessary. Companies that rely on repeat business often mistake not looking after their existing customers and focusing all their efforts on attracting new ones. However, repeat customers are more likely to spend more money with you, tell others about your company, and become advocates for your brand.
After making a profit, but not as much as you would like, it’s easy to think cutting your prices is the answer. This is especially true when you see a competitor taking some of your market shares. But this doesn’t solve the problem. It only makes it worse by adding more discounts to the marketplace. It also devalues your product or service in customers’ minds. Instead, add new products or services that complement existing ones to provide more value at a higher price point.
Having No ‘Rallying Point’
A rallying point is simply something everyone in the company can rally around — a clear mission statement or vision for what you’re trying to accomplish. In the first year, it’s not uncommon for companies to be so focused on surviving that they don’t have time to focus on what they want to accomplish down the road. By the second year, though, it’s essential that you define a rallying point and then make sure that everyone on your team knows what it is and why it’s necessary. This will help keep everyone pulling in the same direction and avoid misunderstandings about what should take priority.
Setting Unrealistic Financial Goals
Many entrepreneurs overestimate the amount of money they will generate during the first two years in business. They forget to factor in the cost of doing business and achieve unrealistic revenue expectations based on nothing more than feeling good about their product or service. When they don’t hit their revenue goals, they either give up or continue to burn through cash at an unsustainable rate. This can easily be avoided by building a solid financial model and adjusting your projections as you learn more about your market and the cost to reach it.
Being All Business, All the Time
Don’t entrepreneurs have lives outside of their businesses? Yet, studies show that entrepreneurs who can separate their personal and business lives have better outcomes. Successful entrepreneurs need to maintain a balance between work and life? Successful entrepreneurs need to balance work and life while still being available at all hours in an emergency. They need to be flexible and adaptable to juggle the demands of both home and office.
Being a Weak Leader
An entrepreneur is concerned about being a strong leader. One wants to be respected and liked for the leadership style. However, the reality is that a good leader is only appreciated by some people and disliked by others. There’s no way around it. If you’re unwilling to make hard decisions, give difficult feedback, or hold people accountable, you will not be a good leader. Plus, as your business grows, you won’t have time to do every job yourself. You’ll need to build a team of people who can take on responsibility and grow your business for you. If you don’t let them learn from their mistakes, you’ll never see results.
Assuming You Have No Competition
In the second year of business, you might think you have an innovative idea or product that will help you stand out from the crowd. However, it is important to realize that many people have previously thought of your thoughts and consequences. There is a good chance someone else is already doing what you’re trying to do. To avoid making this mistake, research your industry and see who your competition is. If you want to succeed in business, you need to set yourself apart from them by offering better customer service, having a stronger work ethic, or creating a better product.
Trying to Get Rich Quick
The allure of easy wealth is powerful, but the reality of making money is a long, hard slog too often. In many cases, what matters are the small steps forward that add up over time.
By focusing on creating products or services that solve a problem and provide real value, you may not get rich as fast as you would like, but you will be moving in the right direction and creating a sustainable business.
Applying short-term thinking when a business is a long-term commitment
Every business owner wants to start making money fast. But don’t make the mistake of undermining your future by scrimping too much in year one or two. You may be tempted to bootstrap the business before seeking outside funding for as long as possible. That’s perfectly understandable, but don’t let it lead you to cut corners on product development or marketing, which will eat into your profits in the following years.
Too much focus on social media
Social media is a great way to connect with your customers and potential customers, but it shouldn’t be the primary way you do business. If all you’re doing is trying to get followers and fans on social media, you will have a hard time getting beyond year 2. You need to get out there and talk to people face-to-face. If you go out for lunch every day, bring your business cards! That will help you make connections and build relationships with people who can help take your company from year 2 into year 3.
Making Competition Personal
When starting a business, it’s normal to feel intimidated by larger companies that have been around for longer than you have. Don’t let this fear turn into anger or resentment. You started your business for a reason — because you wanted to fill a need in the market that other businesses weren’t meeting. If there is a demand for something and customers are willing to pay for it, then there’s room in the market for both of you.
They Hate Criticism
Entrepreneurs just starting often have an attitude that demands improvement. They’re hungry for feedback and want to learn how to improve their products, processes, customer service, and overall business. But after a couple of years, these entrepreneurs often reject constructive criticism because they already know what they’re doing. And it’s true — they know what they’re doing right now. But if they don’t continue to learn and improve, their growth will stagnate.
They Stop Asking For Help
If you’re successful after two years, that’s good. But remember, you’re only as strong as your team and the people around you. You can’t do everything alone. If you’re in a leadership position, it’s essential to have good people who can help you make decisions and execute them effectively. Even if you have an experienced team or a solid board of directors, seeking expert advice from people outside your industry is smart. Don’t let ego get in the way of getting help when you need it.