Entrepreneurship Mistakes PDF 6th Form 2024

Subject: Entrepreneurship Class: 6th Form Date: November 2024 Teacher: Ms. M. Patton Topic: Fundamentals In Entrepreneurship Sub Topic: Mistakes in Entrepreneurship  Objectives At the end of the lesson, students should be able to: ▪ Analyze the var...

Subject: Entrepreneurship Class: 6th Form Date: November 2024 Teacher: Ms. M. Patton Topic: Fundamentals In Entrepreneurship Sub Topic: Mistakes in Entrepreneurship  Objectives At the end of the lesson, students should be able to: ▪ Analyze the various mistakes of entrepreneurship ▪ Evaluate the how entrepreneurial mistakes impact the success of a business  Introduction Successful Entrepreneurs see failure as an inevitable part of their Entrepreneurial process. It is only those persons who are not willing to try anything new, who do not experience failures. Mistakes may be reduced but it is hardly likely that they will be totally removed. A true Entrepreneur does not quit when misfortune occurs, but employs persistence, determination, commitment and consistence in order to achieve success. There will always be failure of various sorts, even with the best of efforts. In the case of a baby, he/she will make a good number of 'falls' before starting to walk unassisted. It is the same for a 'start-up'. It may fall at least once, before being well on its way. However, one must note that there are many ventures that have failed, that had passed the start-up stage.  MISTAKES OF ENTREPRENEURS There are many mistakes that the entrepreneur has to understand and try to avoid in the entrepreneurial process. Below outlines the common mistakes to avoid. Functional Area Mistakes  Production and operations mistakes such as poor inventory planning and stock control.  Finance and Accounting failures such as inadequate information systems, poor financial accounting procedures.  Marketing issues such as inadequate or flawed market research; lack of segmentation and targeting; poor pricing and promotion strategy  Not seeking advice from experienced persons or experts. Trying to do everything for oneself assuming that people in the business understand the mission and goals  MISTAKES OF ENTREPRENEURS  Not responding in a timely manner to customers and clients  Being greedy  Unwillingness to accept other views  Impatience  Not evaluating the vision and mission  MISTAKES OF ENTREPRENEURS Human resource/ Management failures  Failure to value the workers' time and effort- This may lead to high employee attrition rates.  Rushing to fill a vacant position- This leads to the hiring of persons who do not have all the requisite skills. This aspect may have been overlooked due to haste. Proper background checks may not have been made, resulting in the securing of a person who finds it difficult to fit in with the existing organizational culture.  Failure to make rules and regulations clear- This leads to unnecessary violations and wasted time dealing with them. It also lessens the organization's power to lay down penalties where there are infractions.  Inability to place workers in the right positions- This leads to inefficiency due to the under-utization of workers or a worker lacking the necessary skills to perform well. Failure to invest adequately in the training of employees and in continuous professional development programmes- This leads to inefficiency and discontent amongst workers.  MISTAKES OF ENTREPRENEURS  Failure to maintain a system of documentation- This may lead to the failure on the part of management to give commendations where appropriate. This will cause staff to be de-motivated. It may also result in unnecessary lawsuits when workers retaliate when punished for misdemeanors that really occurred, but there is the lack of sufficient evidence of this.  Lack of proper leadership- This will lead to an absence of inspiration and a lack of commitment on the part of workers. It may also lead to any one or a combination of a myriad of problems that can occur when management does not properly carry out its functions. e.g. ethical issues.  Lack of Knowledge/experience- This is tied to 'Poor Leadership' and may cause employees to lack confidence in Management and become uncontrollable. It may also lead to a continuous loss of customers.  Mistakes of Entrepreneurs that Contribute to Business Failure  Marketing Failures - Misjudging the size of the market, a weak marketing strategy, underestimating the competition, not maintaining quality standards, logistical difficulties, uncontrolled growth, poor location and incorrect pricing are all factors that merit concern in relation to levels of profitability. Meeting customer needs and demands are the drivers to marketing success.  Financial Failures- Financial failures include poor financial management control, inadequate record keeping, rising and uncontrollable costs (start-up, operations, capital, and debt), cash-flow and profit problems. Giving attention to revenue and expenditure flows is not to be ignored.  MISTAKES OF ENTREPRENEURS Marketing Failures  Failure to understand Customers' needs- This will result in the business giving the customers what they 'think' they want, which happens to differ from what they really want. This will simply put the entity 'out of business'.  Implementing weak Marketing strategies- E.g. selecting a poor location for the distribution of the products/services. This reduces the visibility of the products and services of an organization.  Cutting Marketing budgets unnecessarily- This causes the organization to be unable to maintain its position in the market and of course, it prevents it from increasing its market share.  Poor pricing strategies- This will lead to the target market not buying or not buying enough of the products or services of the business.  MISTAKES OF ENTREPRENEURS  Uncontrolled growth- This can lead to the 'death' of the entity. Growing 'too fast too soon' is detrimental to any organization.  Financial failures venture- Failure of the Entrepreneur to provide sufficient capital to fund the business The business will not be able to maintain all the existing resources and will not be able to secure additional financing that is necessary to 'grow' the venture. The business will eventually fail.  Failure to carry out adequate record keeping of the business' transactions- This produces chaos. This will eventually lead to the failure of the business.  Inability of the Entrepreneur to control the finances of the enterprise- This presents a chaotic situation. Investors and creditors would eventually lose confidence in the business and this will cause a 'pulling out' and a reduction in support.  Mistakes of Entrepreneurs that Contribute to Business Failure  Management Failures - Management failures include lack of leadership, judgement and knowledge; lack of experience; no management structure and conflicts in relationships. A good and strong management team is essential to a business's success; a one-man show is fraught with danger.  Operation Failures- Operation failures include poor inventory management, poor planning, high operational costs, lack of infrastructural support and little or no control systems. Efficient, effective production and operations are critical to any business venture. The highest quality and maintenance standards are priority.  Mistakes of Entrepreneurs that Contribute to Business Failure  Other Internal Factors are negligence, nepotism, personal problems and non-acceptance of failure. These are areas of concern that impact the state and mind of the business owner.  External Factors External factors include economic, political (legislation), industry- associated problems and other societal issues. It is important to watch for unfavourable trends and troubling signs on the business horizon.