Tips to avoid making mistakes when starting up a business

Why does entrepreneurship fail? Because creating a business is about having meaning, and a purpose, not just accumulating capital, that will come later.

Tips to avoid making mistakes when starting up a business
Anticipate so as not to make mistakes when starting a business. Photo by Riccardo Annandale / Unsplash

Many people think that when starting a business the important thing is to make money, a lot of money, and they could not be wrong; creating a business is about having a meaning, a purpose, not just accumulating capital, that will come later, said C.P.C. Jesús Ascencio Martínez, a graduate of the UAG and Partner of the firm Global Practice International in his lecture "Why do entrepreneurship fail?" that he gave to students of the Social, Economic and Administrative Sciences Department of the Autonomous University of Guadalajara (UAG).

66% of entrepreneurs in Mexico sell less than 500 thousand pesos a year and 89% started their business with money from their family and only 3% received some formal investment. Unfortunately, 75% of the companies close before two years of being created.

The expert, who manages hundreds of accounts and has helped develop various business ideas and ventures, pointed out at least five of the most common mistakes people make when starting a business. These are:

Not having a value proposition

This refers to not offering or understanding "what makes you different" and "what you bring to people", selling just for the sake of selling is fine, but it is not enough, you need to have or offer that "something" that makes you unique.

Lack of strategic direction

Curiously, many Mexican companies do not have this point or do not foresee the future. This is a set of decisions to be implemented that will allow the organization to adapt to its environment competitively, to achieve its goals.

Lack of adequate risk management and control

This is another issue that few understand and foresee. Simply put, it is about aligning strategies, processes, people, technologies, and knowledge to handle possible contingencies, changes, or dangers that could arise, as well as plans to maintain control and order within the company or institution.

Partnering with incompetents

It is about who you ally with, who handles what, and how the functions are distributed within the companies; one of the most common mistakes is to ally with people who are not prepared to manage a business, take responsibility, or with little moral or professional ethics.

Not applying continuous improvement processes

Finally, but sometimes the most difficult of the points to fulfill, is to accept that change is continuous and that it is necessary to invest and improve processes, people, ideas, and proposals to improve production processes, service, distribution, recruitment, or recruitment of personnel.

"It is possible that when trying to start a business you make one or all of these mistakes, you can launch yourself into entrepreneurship without any idea of what you are doing and that is fine, but the best thing is to have a plan of action and start, always bearing in mind that you can make mistakes, but you can avoid the most common ones and I will summarize them for you: look at who you are doing business with; think about what you are offering and how you will do things," he said.

The graduate provided other interesting data such as that in Mexico, 33% of entrepreneurs are between 25 and 34 years old; 1 out of every 3 want to start a business but do not do it for fear of failure and 3 out of every 10 entrepreneurs started their business out of necessity, the rest for looking for a better lifestyle.