5 Expensive Common Mistakes Made by Millennial Entrepreneurs

5 Expensive Common Mistakes Made by Millennial Entrepreneurs - InvestGrowRepeat.com

Gemma Reeves

As a millennial entrepreneur, handling the funds of your business can be quite tricky. Our friends over at FindMyWorkspace.com discuss the expensive common mistakes made by millennial entrepreneurs.

Millennials are lucky enough to have lived in the height of the information age wherein business transactions can be done online and products can be delivered right to every customer’s doorstep.

Technology definitely revolutionized the way people do business nowadays, but when it comes to managing and growing your business, not much has changed. Making business decisions still require considerable foresight, forging the right partnerships, and even accounting and budgeting for operational expenses.

When it comes to doing business, transactions can be done swiftly, all thanks to the Internet. However, managing and strengthening the business for the long term is a different story – and this is the part where some millennial entrepreneurs fail.

Many startups have experienced a boom followed by a bust, lasting for only about five years due to budgeting mistakes, poor decision-making, and generally poor management. Such mistakes, no matter how small or large they are, can be extremely costly.

Millennial entrepreneurs should learn and avoid these common mistakes if they want to grow and sustain their business for the long-term:

Mistake 1: Buying Fancy Office Spaces and Furniture

Well sure, fancy offices with spacious lounge areas, scenic views, and gaming rooms are indeed very enticing, and you may believe for a moment that such an environment is necessary to improve your team’s productivity, but if the business cannot truly afford it yet then don’t.

As simple as it seems, it is important to only stick with the necessities when starting out.

Spending money on fancy, but unnecessary, things will only drain your capital. And the worst part is, it is not going to bring in much return at the end of the day. When considering purchasing anything for your business, think in terms of “return on investment.” If it does not produce a desirable return on investment, then forgo the purchase or go cheaper.

Instead, what millennial entrepreneurs should focus on is the development and delivery of the product to its target market (aka revenue generation).

Mistake 2: Employing Friends and Family

I’m sure you’ve heard it said: It’s all business, not personal. This is true even for startups and millennial entrepreneurs. Employing your friends and family in your company may not seem like a bad idea initially because it's obvious that you can work easily well with these people.

However, the problem is when your friends or family are not actually a good fit for the job, or they simply perform poorly. If you are hiring them out of love or friendship, instead of their skills and knowledge, then you are endangering both your business and personal relationships in the long run.

Taking the time to find the right people to work for you may be exhausting, but investing in them could pay off well for your company in terms of growth, productivity and customer engagement. After all, investment in human capital is one of the most important investing activities for beginning startups.

Mistake 3: Unsustainable Operating Expenses

Most millennial entrepreneurs are willing to tolerate high-risk investments, and this sometimes translates into an obsession with product development and over-the-top service add-ons that are not well-planned.

This excessive spending may be fueled by excess excitement, and the desire to cater to fast-changing trends, but the truth is that adding something new to the table also translates into a need for additional resources, new logistics, and a new area of management in the business.

The expenses can grow exponentially! If you haven’t fully planned for a new product launch, then the result will end up as poor product delivery, unsatisfied customers, and negative returns. Certainly, startups will incur significant expenses in the first few years prior to eventually breaking even, but if your operational expenses are too great for too long, then the company may go bankrupt.

Mistake 4: Poor Planning or No Planning

Although many inventive and genius ideas stem from a spontaneous “eureka” moment, creating and growing a business cannot succeed without a detailed plan. You need to have a development plan (with definite timelines), and a back-up plan when things are not going too well (especially when it comes to money issues).

Mistake 5: Failure to Delegate

As the founder of a business, millennial entrepreneurs might think that they are the only ones who truly know the ins and outs of it. Although being hands-on during the first few years of establishing the business is recommended, this does not mean that you should still be controlling everything.

If you do all the work, then the business will never grow beyond your level of productivity. It will stagnate and eventually fail.

The reason why you must hire employees, and eventually managers, in the first place is to grow via accumulated productivity by allowing them to take over the daily operations of your business. For the most part, every young entrepreneur’s aim should be to take responsibility for building business partnerships, growing, and expanding, while you delegate the rest to a great team.

Bonus Mistake: Inadequate Knowledge

Growing your knowledge is essential to success, especially knowledge relating to your specific industry. Many millennial entrepreneurs make the mistake of immediately diving into the world of business without enough knowledge and preparation on their part.

This eventually leads to emotionally driven actions, poor decision-making, lack of business planning, and ultimately poor financial management. Without adequate business knowledge, many millennial entrepreneur startups are destined to ultimately fail.

Gemma Reeves is a seasoned writer who enjoys creating helpful articles and interesting stories. She has worked with clients across several different industries including advertising, online marketing, technology, healthcare, family matters, and more.

She is also an entrepreneur engaged in assisting other aspiring entrepreneurs in finding the best office space for their business. Check out her company FindMyWorkspace

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