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Avoid These 10 Mistakes When Starting Your New Business

By: Jeremy Bowler

 

Do You Make Any of These Common Management Mistakes

If you are not a seasoned entrepreneur, then you will soon find that it’s all too easy to make mistakes from time to time. The commercial world is hard to navigate, and it can be downright treacherous, especially for new business owners. If you want to make sure that your new business has the highest chance of success then this guide will help you avoid some of the mistakes that most entrepreneurs make.

Being Too Scared of Failure

You must make sure that you aren’t too scared of failure. As a new entrepreneur, you probably know that most businesses fail within their first year, but if you don’t take risks because of this then you may never see your business succeed. The trick is making sure that you strive for success, but that you also learn from your mistakes. How you pick yourself up after you fail will truly decide whether or not you end up coming out on top.

Leveraging the knowledge and insights of industry experts can be an invaluable strategy in minimizing the risk of failure. These professionals, like David Shulick, a specialized industry expert, have already walked the path you are embarking upon. They’ve faced the ups and downs and have a deep understanding of what works and what doesn’t in the industry. Their experiences provide a reservoir of knowledge you can tap into, helping you anticipate potential pitfalls and make informed decisions. But remember, while their guidance is important, it’s equally critical to maintain your unique perspective and innovative spirit. Success is not just about avoiding failure but also about adapting, evolving, and pushing boundaries in your own unique way.

Not having a Solid Business Plan

Too many companies start without having a solid plan. If you don’t plan for success, then you will be planning to fail. Every start-up should have a solid business plan, even if it’s just one page. You should also include, within your plan, how much it costs for you to operate your company on a monthly basis and what you anticipate selling. You also need to know who is buying your product and why, so you can then work to the needs of your customers.

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Being Disorganized

Being organized is key to your business success. Running a small business is very similar to being the ringmaster at a circus. It is very normal for you to have multiple things going on at once, and if you are not organized then you may find that things become overwhelming very quickly. One way for you to combat things like this would be for you to have a daily task list. This needs to include all of the tasks you need to get done that day, so you can be productive and you can effectively make sure that you are not missing anything off your to-do list.

Not Defining your Target Audience

A huge mistake that people make with their start-ups is not taking the time to understand their target market. If you are a technical founder then you may be able to write code, but at the same time, you may find it difficult to converse with your customers.  Unfortunately, there is no way for you to know if you are on the right track or not unless you are getting constant feedback from the people you work with.

You have to know that building a great product doesn’t mean that your company is going to be successful. There are other elements involved, and a lot of it comes down to having a solid understanding of who your audience are and what they want from you. If you need some help with marketing to your target audience then hiring an e commerce SEO agency is always a good idea.

Choosing the Wrong Legal Structure

The biggest mistake you could hope to make when starting a business is not registering your business properly. You may find that you end up picking the wrong business entity and that you fail to protect your intellectual property. Areas like this are crucial to your start-up and if you do not take the time to protect your company here then you may find that you end up costing yourself time and money later down the line. If you don’t take the time to register your business properly then you may find that you end up having your name taken by another company as well and this is the last thing you need.

Trying to Go At It Alone

One huge mistake that a lot of company owners make is that they think they are alone. They start a business independently and they do not surround themselves with the right people early on. Although this mistake can be rectified later, you have to remember that it can have severe consequences. If you want to do something about this, then you need to have people around you who you can count on for advice and who you can get continuous feedback from. You are never alone in your business, even as a solopreneur, and if you want to become as successful as possible then this means asking for help from time to time.

Teaming up with Bad Investors

One very important piece of advice that you need to take note of before you go into business would be for you to choose the right investors. At the end of the day, your investors are more than just financial backers. Your first set of investors could easily make or break your company and you should never appoint them to help you with your company unless you have proof that they have confidence in you. Once you have your initial seed funding, you can interact with investors who can help you to take things to the next level. That doesn’t mean that the initial investors you partner with should be overlooked, however, so be mindful of that if you can.

Avoiding Contracts

One huge mistake that a lot of entrepreneurs make when they start a business is that they do not implement contracts. They think that a spoken agreement is enough, but this is not the case. It doesn’t matter how good your relationship with someone is, because it can come to a screeching halt if you aren’t careful. You need to make sure that the right systems and agreements are put into place, and you also need to make sure that you are not overlooking the importance of a contract. If you need some help with your contracts, then it could be a good idea for you to hire a lawyer to help you with the general process. They can give you the support you are looking for from a legal perspective so be mindful of this if you can.

Hiring too Soon

The biggest mistake that people make is easily hiring too soon. Sure, you want to expand your business and you want to be able to reach new heights but at the end of the day, you need to be mindful of your hiring practices. If you hire someone too soon or if you hire someone to work full-time when you only need them part-time, then this will put a serious drain on your finances. You need to try and make sure that you are mindful of when you are taking on new team members and you also need to make sure that it makes sense for your business.

If you want to do something here, then it is wise for you to hire subcontractors or freelancers and then work your way up. As you need more support, you can take on more staff and then when you are at the point where you need someone full-time, you can hire someone in this capacity. Remember that having a team of freelancers can sometimes be more beneficial to you. It may be that you can take advantage of their diverse skillset or that you can capitalize on their different levels of experience.

Underestimating Capital

A lot of business owners think that they can get further with less if they make a few changes. This is understandable and sometimes it’s true. That being said, if you continually try to minimize equity then this can result in challenges and delays. Start-up leaders tend to anticipate the best-case scenario, and this is great, but it’s not always good for business.

Positivity does have its place but if you aren’t careful then you may find that you end up compromising your business and this is the last thing you need. One way for you to work around this would be for you to watch your numbers and to also make sure that you do not underestimate your need for capital. Numbers don’t lie and if you look at them objectively then this will help you out quite a lot in the long run.

Wasting Money

Another mistake a lot of entrepreneurs make is that they waste money. If you dwindle your money away or if you are somewhat irresponsible with your cash flow, then this is a death sentence for your company. It may be that you make the mistake of hiring too many people, as opposed to using that same money to concentrate on your sales funnel, for example.

Either way, it can be hard to know, as a new entrepreneur, what you should be spending money on. If you want to help yourself here, then it could be wise for you to hire an accountant or for you to hire a mentor. When you do this, you can then get the financial advice and support you need to make good business decisions, without having to second-guess or question things.

Remember that it is always better to spend money on good advice than it is for you to save money and make the wrong decision.

Published: March 30, 2023
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Jeremy Bowler

Jeremy Bowler is a full-time copywriter of five years specialising in business and finance. Jeremy graduated from the University of Chester with degrees in business accounting and finance. He's an avid traveler and has taught English in Nepal, Malaysia, and Japan and has produced copy for Neil Patel, Entrepreneur and Metro amongst many other high-end publications.

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