It is indeed commendable to notice that some graduates in Pakistan are inclined towards entrepreneurship. The courageous risk-takers are keen on starting their own business or taking their existing businesses to new heights.
However, I have observed a few avoidable blunders in some businesses (especially start-ups) in Pakistan. As a business graduate, I want to present my insights on this. I feel that it is imperative that everyone avoids the common mistakes that lead to the failure of any business. I believe that all this should be taught publicly and explained in a very simple manner (for everyone to understand). Some of the many errors that commonly occur in the world of business are:
- Not understanding the market
Whenever a business offers a commodity or a service, it is essential to understand the “market” first. It is important to realize that for a business to succeed, there should be a “need” existing in the market for that product or service. Simply stepping into a competitive market and offering a product or service that already exists does not guarantee success. Instead, any offering should be based on a comprehensive understanding of the market. A business should aim to fulfill the “needs” of others through its products or services. Success is highly probable if one executes his or her business plan this way.
To illustrate, let`s say that you intend to do business in a residential society that has recently been inhabited by people. You must first identify the “needs” of the people living in that society. What do people here need but do not have? Then, you must come up with a “solution” for that “need” through your product or service (offering). After analysis, you realize that, for instance, there is a “need” for a good computer repair shop in that residential society. Your findings also reveal that there are a lot of computer users in that area. You should, then, focus on doing this specific business in that residential community.
- The “First Mover Advantage”
Another mistake that businesses normally make is not taking advantage of being “first-movers” in the market. The first mover, as the name implies, is the first business to operate with a particular product or service in a market. There are numerous benefits to being a “first-mover.” First, you operate your business in an environment that has no competition. Secondly, you gain the “time” and “experience” of operating in that market. Furthermore, your business can establish a credible “brand image” when operating in that market.
For example, if you start your own restaurant that offers the same food items (Biryani, Pulao) that three other restaurants in the vicinity offer, then your business is not likely to be very successful. Instead, however, if your restaurant offers something new to that area (and people also like it), then your venture will yield great returns. By the time other newcomers arrive in the market to give you competition, you will have already established your “name” in that market.
- Not taking care of all “stakeholders”
Another common mistake that businesses in Pakistan make is solely taking care of their customers and not other stakeholders. Whereas customers play a pivotal role in the success of any business, giving due importance to all stakeholders is equally significant. One of the most important stakeholders in any business are its employees. Their satisfaction, work performance, attrition (or retention), and overall feedback about your business can decide its success or failure.
Let’s take an example of a renowned bakery in an urban city such as Lahore, Islamabad, or Karachi. This bakery sells the best confectionary items in the city. The customers are satisfied with the products offered. However, if the bakery employees or workers are not paid on time or are not given due respect and recognition, they are likely to leave. Once that happens, not only will the bakery`s functioning suffer, but also its reputation will be tarnished. Even if those employees are replaced, it will take time, effort, and costs to ensure smooth operations again. Successful businesses, therefore, regard and treat their employees as their own “family”. (In true spirit)
- Maligning or defaming your competitors
Another tactic used by some businesses is to “defame” or “badmouth” their competitors. Not only is it highly unethical, but such attempts are usually counterproductive and futile. Customers eventually get to know the “truth” and discard any such malicious campaign. In fact, it works in favor of the business that is being “targeted”. Another interesting fact to know is that one of the signs that an individual or business entity is doing well is that it is subject to rumors and propaganda. Instead of putting other businesses down, the focus should be on improving one`s own business operations, products (or services), and relationships with customers.
Let’s assume a hypothetical scenario. You sell books, and so does your competitor. Since he is selling really well (and you too want to), you have two options. The first option is to compete in an ethical manner by working on your own business strategies, overcoming your shortcomings, and attempting to be better at selling and marketing. The other choice is to harm the reputation of your competitor so that fewer customers come to him (or more come to you). If you choose the former, you are likely to gain long-term success and prosperity with integrity. If the latter is your choice, it is quite probable that it will backfire, and you will lose even your existing customers. Thus, it is always wiser to focus on the betterment of your own business.
There is little doubt that in today`s competitive world, both individuals and businesses need to be well-equipped and prepared to cope with challenges. With the appropriate strategies and avoiding the mistakes mentioned, a business can achieve desirable outcomes (return on investment (ROI), brand image, profit margins, etc.). These blunders, even though they may appear trivial, increase one’s own (not-so-obvious) “business costs” in the long run. Since every business aims to mitigate costs and maximize gains, it is best to “strategize” aptly. In the words of Jack Welch,
“To be successful, you have to have your heart in your business and your business in your heart.”