It is an unfortunate fact that many businesses fail within the first few years. While it may be a combination of reasons, such as bad marketing plans, insufficient funds to keep up with orders, or lack of stuff, it is never easy to have a business fail. Here is look at five common mistakes that often cause businesses to go under and what you can do to avoid them.
Borrowing Too Much Money
There is no denying the fact that having a large chunk of change in your company’s account is a great feeling, but an influx of cash can be a double-edged sword. Business owners that borrow too much money early on will often find themselves struggling with repayment plans and interest rates. Before taking out any loans for your company, you should make sure you are only getting exactly what you need.
Not Being Flexible
You no doubt have a very clear vision for your company and its future, but it is absolutely vital that you remain flexible and agile. One of the only ways that smaller companies can compete with international chains is by making quick changes to their business model in order to adapt to the market.
Neglecting Your Online Presence
Failing to nurture a brand’s online presence can be a disastrous mistake for businesses of any size. Many business owners tend to believe that a mediocre website or second-rate app is perfectly acceptable while their company is growing, but these digital mediums are most likely the first contact point you will have with all future customers.
Being a Perfectionist
Business owners will also need to understand that there is an appropriate time and place for being a perfectionist. Whenever you are tackling a new problem, try to think about how it is going to affect your company immediately and over the course of a few years. This will help you get a better perspective of the project and decide just how perfect it needs to be.
Not Hiring a Lawyer
One of the most common reasons that small and mid-sized businesses fail is because of legal troubles. From tax issues to civil suits, an experienced legal representative by your side will be an invaluable asset. An attorney can help you with everything from drafting your initial business plan to correctly filing your LLC paperwork.
In the end, the best way to avoid these mistakes is to be thorough and deliberate in everything that you do. A little extra planning when your company is in its infancy can save you from quite a few troubles later on.
Author: Anita Ginsburg is a freelance writer from Denver, CO. She enjoys writing about business for companies like Compusmart Solutions, which can help businesses with mobile app development.