Starting a new business is always a scary proposition as you never know the risks you will face. But, regardless, you took the initiative and started your business. So, how can you be successful in your endeavour?
There will be many unseen obstacles, and nobody can prepare you for them. However, there are several petty mistakes that can be avoided if you plan your approach properly. Hence, we have compiled a list of six common avoidable mistakes that can cost you your startup.
- Too Afraid to Fail
As stated earlier, starting a business can be scary—many times, too scary. As a result, too often, business people are so scared of making mistakes and failing that they overlook the positive side of things. It is recommended expert advice not to keep the fear of striking out keep you from making your move.
The quickest and easiest method to avoid the fear of failure or to commit mistakes is preparing. Preparing a clear and concise plan that comprehensively addresses your needs is a great way to stay on top of things. Read and comply with the tax laws and accounting best practices. Understanding that to err is human is important as you will commit mistakes regardless of how much you prepare. Small mistakes small business owners make will teach you valuable lessons for your journey ahead.
- Absence of a Marketing Plan
Opening a new business is just the start of a long journey ahead. Inevitably the start of the business will be slow and tedious. To put your business on the right track, it is necessary to have a marketing plan. However, just having a marketing plan will not help you. Although many businesses implement marketing plans, most do not succeed. In order to succeed, you have to develop a marketing plan that is relevant and align with your customers and future prospects. Unfortunately, too often, startups implement a marketing plan in a rush without acknowledging their customer demands and needs. As a result, the resources generated and running the marketing plan are squandered. The best way to avoid such a scenario would be to generate a business plan that includes market analysis as an integral part. The results generated by the market analysis should be implemented by the subsequent marketing campaign. Some helpful methods to optimise your marketing plan would include prompting user reviews or customer surveys.
- Squandering Resources
Startups are highly prone to stretching their resources thin and wide. As a result, a common problem to all startups is that they lose out on a chunk of their resources early on unnecessary items. Buying equipment that they don’t need, spending excessive amounts on advertising, renting out larger facilities, etc., are some of the common factors that contribute to their depleting accounts. Spending too much too fast will inevitably bankrupt your company. The best method to avoid finding yourself stuck in such a dire situation would be to set a solid budget. Create a business budget and stick to it regardless of the difficulties faced. Yes, there might be instances when it might seem that spending in some other areas of the business might be more suitable than the planed areas. However, trust your planning abilities and refrain from taking such actions until it seems absolutely necessary. Remembering that the budget you outline is a guide will help you review it properly. Hence, annual budget reviews are important to gauge spending and adjust the plan accordingly for the next fiscal year.
- Being a One-Man Team
It is true that nobody you hire would feel the same way about your business as you do. As a result, it is highly likely that you would outperform everyone on your team in terms of sheer work ethic. However, that doesn’t mean that you can do everything on your own. Many startup owners are prone to this shortcoming where they put the weight of the world on their shoulders and refuse to heed to anybody’s advice or thoughts on any matter. As a result, these entrepreneurs soon find themselves burnt out and exhausted. The startup starts to feel overwhelming, and without immense amounts of passion and perseverance, most will crumble.
Hence, it is highly advisable to avoid such a scenario. Remember that it is okay to ask for advice and help when needed. Even asking for guidance from other experienced business owners might not be a bad idea. Delegate the work accordingly and relieve yourself from some of the stress. Looking for partners might also help.
- Superficial Hiring
A ship requires a determined captain and skilled sailors to tread treacherous waters. The same is applicable to running a business. Hiring the wrong person to do a task will not only delay to the process but also create a possibility of complete failure. You might like your friend very much and want to hire them, but it is highly advisable to check their fit with the company requirements. On the other hand, hiring the right person will undeniably relieve some of the stress as you can trust them and delegate responsibilities accordingly. Understand your employer responsibilities and hire responsibly. Hence, the best way to avoid this mistake would be to study your budget and check your affordability. Check the industry trends regarding payrolls, taxes, and typical wages. Then, gauge the importance of the job you’re hiring for, whether it requires a full-time or part-time hire. Also, hiring skilled HR personnel could also help.
- Unmanaged Books
Business owners have to fill a lot of shoes. However, the most common of them all is that of an accountant. Unfortunately, most owners are not accountants, but they have to complete the bookkeeping responsibilities. Not doing so will lead to improperly filled tax forms and gaps that would lead to major problems in the long term. Hence, having a basic knowledge of accounting and fund management is necessary to run a business successfully. The best way to avoid committing such a mistake would be to hire an accountant. They are professionals with working knowledge of the recent laws and regulations and can greatly ease your woes. They can also help you analyse data for better insights. Using accounting software is also a great option as it would complement the accountant and streamline the invoice processing, payment tracking, and other tasks that could be automated.
Running a business is not an easy job. It is riddled with variables and challenges that could affect your success drastically. There will be some unavoidable mistakes, but handling a business should not be more difficult than it already is. So, understand these common mistakes and attempt to avoid them actively. Even if you commit a few mistakes, don’t worry and learn from them and move on.