Running a business is a very exciting endeavor, but it isn’t without risks.Tim Berry, the founder of Palo Alto Software states that entrepreneurs that understand and plan for these risks are twice as likely to succeed are those that recognize the risks and take steps to address them. Here are some of the common pitfalls that you need to avoid.
Tyrannical Leadership Style
Decades of research from has shown that managers that take an overly autocratic approach to leadership tend to destroy employee morale, which can destroy the business from within. Successful entrepreneurs will empower their employees and give them flexibility to make decisions.
Failure to Understand Competitors
Every business faces competition. You can only succeed if you can convince your customers that you offer the best product, so learn as much as possible about your competitors.
Lack of Cash Flow
Increasing profits is the core goal of every business. However, many businesses fail to understand the importance of cash flow. You may do a great job running your business, but if you don’t have enough cash on hand to meet your payroll costs and other expenses then you will be driven into bankruptcy. Always make sure that you have enough cash on hand to meet your expenses while waiting for payments from customers.
Inconsistent Branding Strategy
Your company’s brand will be its single most important asset. Unfortunately, a large number of companies fail to convey a consistent brand message. You need to formulate a brand vision of your company as soon as you create a vision of your business and build it consistently.
Failure to Test
Every business is going to make mistakes. The smart entrepreneurs recognize their shortcomings ahead of time and develop a system to measure outcomes and modify their strategy to improve long-term results.
Every business is subject to numerous regulations and taxes. Failure to abide by these laws can result in massive fines or the loss of your operating license. You need to understand these regulations and follow them very closely to avoid any problems that may arise.