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Entrepreneurship Pitfalls to Avoid

by Karen Bryan on March 5, 2012

Here are my tips for entrepreneur pitfalls to avoid. I’ve fallen into almost all these traps, so with these tips, hopefully you can be better prepared.

Working Too Much

You’re focused and determined to succeed in building your business. However, you still need to look after yourself. Working long hours may be a waste of time if you’re so tired that you’re not very productive and your health begins to suffer.

You really do need to take some downtime, go out with your friends, do some exercise, go away for a short break. I find that even when I’m not working, I’m still thinking about work. It’s hard to switch off because there’s always so much to sort out.

Being Unrealistic

Part of the lure of being an entrepreneur is having freedom and control. However, you’re still at the mercy of customers and suppliers. Also, once a hobby becomes a job, it loses a lot of its allure as you wade through tasks that are of little interest to you, e.g. admin.

Don’t fall for claims of “making money online,” many people selling this dream only make money out of you. So check their credentials and reviews before you open your pocketbook.

If you have caring commitments do you have a back up plan, e.g. what will happen if the kids are sick and can’t go to daycare/school? This isn’t being defeatist, it’s being realistic.

You can read more of my thoughts on the advantages and disadvantages of being self employed.

Not Achieving Goals

You need to have specific aims. When I finally gave up my day job to concentrate on being an online publisher, my goal was to replace the earnings from my day job after two years. I resolved that if I didn’t reach that income level, I’d need to find another day job. Bear in mind that if your net salary as an employee is e.g. £25000, your net profit will have to be a lot more than that to cover benefits such as sick pay, employer contributions to your pension and holiday pay.

Some people argue that you have to think big in order to achieve. Personally, I don’t want to run a large business. My aim is to earn enough money working flexibly from home. I don’t want to have employees or have to attend meetings on specific days.

Whatever your goals, the chances are that you won’t achieve them all. So, as long as you know you did your best, don’t be too hard on yourself.

Falling Foul of the Law

Once you have employees you will have to adhere to all sorts of legislation on the minimum wage, holiday pay, health and safety and disciplinary procedures.

One of my blogging friends received a high court writ for allowing a comment on one his blog posts which was claimed to be libelous; he settled out of court to avoid possibly enormous legal expenses.

Poor Marketing

Even if you have a great product or service, prospective customers need to be able to find you. If your business is web based, then you’ll need to get to grips with Search Engine Optimization (SEO). There’s a lot of hype about being active in social networks such as Facebook and Twitter, but this can end up taking up a lot of time and not delivering in terms of sales.

Sometimes it’s said that women can lack confidence and not be as good at selling themselves as men. Although it may not be in your nature to be boastful about your achievement and abilities, you need to exude belief in yourself for your business to prosper.

Cashflow Problems

Even if your business is doing well, you can still experience cash flow problems, e.g. if you have to pay for stock, but a customer doesn’t pay you by the invoice due date and your bank loan repayment is due. If you take out a larger loan than you need, you’ll be paying interest on that loan – but might that be preferable to your business failing?

Trying to Do Everything Yourself

This is a tricky one because initially you may not be able to afford to hire experts to design your website, do your accounts, etc. It’s unlikely that you’ll be good at all skills required to grow and run a successful business. I was fortunate that one of our sons was a computer science student, as I wouldn’t have gotten started without him. I’ve also had to learn some HTML computer code and do my own accounts.

Not Following Your Instincts

Women are sometimes accused of being too emotional and making decisions with their hearts rather than their minds. While it’s important to seek advice and consider different perspectives, I believe that you need to have a feeling about what’s the right decision for you and your business. I’ve sometimes tried to rationalize too much and ended up making inappropriate decisions when, with the benefit of hindsight, I should have gone with my gut feeling.

Karen Bryan

About Karen Bryan

Karen Bryan is editor of Help Me To Save, where you'll find tips on how to save more and use your money to get the life you want.

{ 12 comments… read them below or add one }

Michelle March 5, 2012 at 10:38 am

I don’t have my own business, but working too much is something I’m guilty of!

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The Happy Homeowner March 5, 2012 at 11:23 am

This is such a great list–I’m in the early stages of launching my own business so I’ll definitely be bookmarking/referring to this list. Thank you!

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One Frugal Girl March 5, 2012 at 11:52 am

I’d add don’t be afraid to find a good accountant to help with your taxes. They have a lot more training and can help you save a LOT of money on taxes.

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Karen Bryan March 5, 2012 at 2:14 pm

@Michelle – I think it’s become the norm to work long hours, whether you’re an employee or self employed.

@The Happy Homeowner – I’m happy to hear that you found my article useful.

@One Frugal Girl – Paying an accountant could mean you save money on tax but I”m not sure if you’d save enough to more than cover their fees, it partly depends on the level of your earnings.

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One Frugal Girl March 5, 2012 at 9:20 pm

The more you earn the more vital it becomes to hire an accountant or tax advisor, but even if you don’t make a ton it can be helpful to find one that can advise you. Even if you pay a one time fee will be worth it as you can use the advice year after year to save money.

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Yelonda Mack March 5, 2012 at 4:09 pm

Hindsight is 20/20. I have made several mistakes as an entrepreneur that I am recovering from now. One of my greatest lessons learned is to always do substantial research about your business beforehand.

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Jan Messali March 5, 2012 at 5:49 pm

Working too much is definitely a pitfall. I started a small business a couple of years ago and worked so much that I wasn’t enjoying anything – work or home- any longer. I’ve learned to cut back.

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444 March 5, 2012 at 8:53 pm

Every single one of these tips are great, but in particular, I would say that the one about comments is important. It’s amazing how many companies, publications, and colleges allow damaging comments to remain when it would be so easy to hit the delete button. Would they leave graffiti on their storefront?

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DeeAnna March 5, 2012 at 9:17 pm

I don’t own my own business but I very guilty of spending way to many hours at work

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Karen Bryan March 6, 2012 at 7:36 am

@Yelonda I agree regarding the research prior to launching a business. I did this for Help Me To Save and the site got traffic and a Google Page Rank much more quickly that my travel site.

@Jan I find that working from home makes it even easier to slip into working long hours.

@444 I have mixed feelings about blog comments. Often a very high proportion of commments are from other bloggers and hardly any from (non-blogger)readers. I think that allowing some negative comments is a good thing, to avoid the (unrealistic) long list of sychopantic comments. To me, how a company deals with negativity/cusotmer gripes tells me a lot about that company i.e. if they are interactive, listening to customers or trying to control social media so that only positivity appears.

@DeeAnna – It seems to me that there is more pressure on everyone to work more. If you’re an employee you want to impress the boss and/or if everyone else works long hours you stand out by working shorter hours. If you’re self employed you’re trying your best to make a success of your business.

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Pamela Halligan March 6, 2012 at 3:33 pm

I’ve thought about starting my own business, but fear many of these issues, including cash flow problems, falling foul of the law and setting unrealistic goals. I’m looking forward to following these posts and learning from your advice.

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Karen Bryan March 8, 2012 at 4:32 pm

@Pamela it’s better to aware of the potential pitfalls before you start so you can try to set up buffers in case you do encounter any of these issues e.g. keep on your day job part time until your business is established and/or build up your savings so you have money to live on if it takes the business takes longer than anticipated to generate cash.

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