Mistakes you should stop making as an entrepreneur

Hiring cheap labour to cut costs

At face value, it makes business sense to hire the cheapest people to your team. However, making hiring decisions based on cost can also backfire on you. Cheap labour is cheap for a reason - they're likely to be unskilled, inexperienced, and unreliable.

Highly-skilled and experienced employees expect to be paid well for their services.

That, however, doesn't mean that you should hire unnecessarily expensive employees.

Look at what the average market rates for particular roles are in your area and try to offer competitive salaries. The more skilled and experienced the employee is, the more you'll have to shell out. To find the right person for the job, think about what they'll be doing. What will their day-to-day tasks look like?

What part of your strategic plan do they fit into? Use this information to write a detailed job description. When interviewing, ask questions that help you gauge the candidate's experience, skill, and fit. Having strong team members is key to sustainable business success.

Over analysing your ideas

While some entrepreneurs fail to plan adequately, others get caught up in over-planning - which can lead to analysis paralysis.

This makes it impossible to make quick business decisions and seize opportunities as they present themselves.

Analysis paralysis is the cause of many project delays, seemingly endless planning sessions, and slow movement between production stages.

To be successful in the cut-throat business world, entrepreneurs need to be decisive. Spending too much time gathering information can easily turn into stalling.

Accept the fact that no matter the amount of research, you can never know everything.

Do enough research to identify a few important factors and make a decision.

Are you likely to end up making the wrong decision? Yes. However, inaction can often be costlier than taking no action at all.

Be flexible enough to learn from your mistakes and course-correct where necessary.

Pricing your products wrong

One of the important choices you will need to make for your business is the pricing of your products. Every area of your business will be affected by the price point you select, including cash flow, profit margins, salaries, and which costs you can afford to cover or not.

Pricing a product too high can drive away potential customers. Pricing the product too low means not maximising business profits. Unfortunately, there's no one-size-fits-all approach to setting the perfect price.

To set the right price for your products and services, you have to track what your competitors are charging. In addition, make sure to cover your costs and have healthy profit margins at the top.