Entrepreneurship has been a buzzword amongst the young in Singapore, and institutions like the Singapore Management University and many other tertiary campuses are placing emphasis on developing business minded students towards entrepreneurship.
It is a hard truth of being an entrepreneur in Singapore, or anywhere in the world, that you may fail. There are many reasons why entrepreneurs fail, and the great thing about being one is that you are likely to come across the same hurdles and challenges that visionaries and trailblazers before you have encountered.
This means that you can learn from the mistakes of past entrepreneurs when you are starting out, selling your first product or service or collecting your first revenue.
We look at some of the most common reasons why young entrepreneurs in Singapore, even if they are graduates from Singapore Management University (SMU), Nanyang Technological University (NTU) or even the National University of Singapore (NUS) might fail early in their journey toward achieving great success.
1. Thinking That Starting Quickly Means It’s Easy
Many businesses that entrepreneurs found have very low barriers to entry. What I mean by this is that there are relatively low costs and not much time required to begin trading. A simple way to think of this is how easy it would be to begin tutoring fellow university students to explore businesses with low barriers to entry, compared to opening the doors on a five-star restaurant.
Similarly, businesses involving websites can be engineered quickly and “open their doors” for trade in rapid succession. The same thing is true of apps, with the Apple App Store and the Google Play App Store both home to literally millions of applications, with more being added each day.
What entrepreneurs need to realise is that just because something is easy to begin, it does not mean it is easy to make money from. In fact the opposite is true. The lower the barriers to entry, the more competitors there are in the market, and the less customers there are for any one business.
Businesses that are simple to enter can be incredibly profitable, but generally only in the early stages of the industry. Websites like Ebay and Amazon are examples of these, so are apps like Fruit Ninja and Angry Birds.
2. Failure to Plan
There is an old and often repeated saying that goes: “if you fail to plan, you plan to fail”. While it may seem over simplistic, this short saying holds true. Entrepreneurs who have an idea must also be able to see how they will move from having an idea in their mind or sketched on a notebook to a viable financially sound product.
This is especially the case for entrepreneurs who have ideas that are disruptive and change existing notions. For example, Dell computers abandoned traditional retailing in stores for a direct to customer model, essentially becoming a mail order retailer. But to do this with such a high value item Michael Dell had a detailed multi-point plan to make sure that customers embraced this model in large scale numbers.
Going against the trend is one of the most common ways great entrepreneurs succeed, but the one thing they have in common is a solid plan. This plan can change as you learn and evolve, but there must be one to rely on.
3. Social Media Friends Are Not A Substitute for Customers
In the age of social media, especially in start up companies in technology savvy hubs like Singapore, it is very important to forge connections with customers of your product or service on Facebook, Twitter, Pinterest and many more.
But too many entrepreneurs make the mistake of confusing social media fans for customers. While a popular on-trend or well-known brand may have hundreds of thousands of followers, they may only have a few thousand paying customers. Growing your social media community is a great way to drive business, but always remember that your job as an entrepreneur is to convert these fans and followers into paying customers.
4. Too Much Input
One thing about being young entrepreneur is that you will quickly realise that there are literally dozens of sources of advice. But while the advice of friends, family, peers and mentors is valuable, it should never be confused with knowledge and wisdom.
Knowledge and wisdom are what you gain through your own experiences, successes and failures. And the thing about advice and opinion is that it is cheap, and therefore you need to be careful to separate opinion from knowledge gained from experience. Always seek credible advise from proven and experience successful entrepreneurs.
5. Lack of Humility
One of the most common failings of entrepreneurs is also the hardest to prevent. But not being able to recognise the need to change direction, get outside help or even start again is the hardest thing for many entrepreneurs to do.
It is important to remember that stubbornness and ego does not lead to more customers, more revenue or profits. What does is focusing in your business, your services and your customers, and always being able to adapt to suit the circumstances you are in.
The above is not a complete list of every reason why all entrepreneurs fail. But if you read this list and avoid these common mistakes, your path to being a successful entrepreneur in Singapore will be much smoother, and your eventual success will be much more likely. You may also like to attend entrepreneurship talks organised by Light A Dream to gain more insights as you embark on this exciting journey.