Want business success? Avoid these nine mistakes when setting up your business.
Starting a business is a journey with a lot of sharp turns. Most entrepreneurs start with immense enthusiasm and optimism, which can be both a boon and a bane. But it is important that they factor in certain roadblocks.
These tips will help you to avoid common small business mistakes.
If you are starting your own business, make sure you don’t make these business mistakes that could sabotage your new venture:
#1. Starting without a plan
One of the biggest mistakes that can jeopardise your venture and your dream is to go on impulse. In a business, you cannot afford to go with the flow. You need to have a concrete action plan and a few contingency courses of action should things go South.
Now you must be thinking – it’s too time consuming, or it’ll cost a lot. Well, let me assure you investing the time and money now will save you much more of both in the near future.
So, rule number one – MAKE A PLAN.
#2. Starting alone
You’ve probably heard the saying – “If you want to go fast, go alone; If you want to go far, go together.”
This is especially true in business. There are many facets to almost any business venture including research, product/service design, product/service development, test marketing, marketing, accounting, financing, customer acquisition, and talent acquisition. No single person is good at all these aspects. Therefore, you need a team, a group of people who can take over smaller aspects of the business. This will increase business productivity and reduce costs.
Rule number two – FORM A TEAM.
#3. Putting off being legit
Starting a business is always a great idea. But starting without creating an entity or delaying legal formalities is not.
With compliance regulations becoming more and more strict over time, you definitely want to create a legitimate entity from the go. Check whether the name is unique, and the company is registered as per the organisational structure followed. You can hire a copywriter to help you with these regulations.
Rule number three – DON’T WAIT UNTIL YOU MAKE PROFITS TO CREATE A COMPANY.
#4. Starting without enough capital
Capital is the money or resources that form the initial investment made into your venture. If you follow the first rule and create a concrete plan, you can estimate the monetary requirements for your endeavour and the minimum stock levels, SKUs and facilities needed.
Once you create the visual analytic forms and estimate how much capital you need, you should match that with how much you have and how much you need to raise. Then, find various sources of finance.
Rule number four – MAKE ACCURATE ESTIMATES.
#5. Going low on tech
Technology is the biggest gift that these modern times have given us. But to many, technology still means a computer, an internet connection, social media and a bunch of email addresses.
If you’re a new business, you need to make optimum utilisation of advancements such as automation, artificial intelligence, machine learning and big data analytics.
Rule number five – GO BIG ON TECHNOLOGY.
#6. Spending too much on marketing
Spending exorbitant portions of your capital on marketing across multiple channels may seem like the fast lane to success, but it may lead to the failure of your venture.
The right path to making the most of your marketing efforts is to analyse which channels bring you the most business, cost effectiveness of each of those channels and then cashing in the most effective ones.
Rule number six – MARKET ACCORDING TO YOUR AUDIENCE.
#7. Assuming goals, plans and objectives are optional
One mistake that many entrepreneurs will definitely make is to ignore documenting their goals, plans, objectives, mission and vision statements.
A business goes through various cycles and its journey is very unpredictable. What you can count on though, is that you may need to raise more capital through fundraising rounds. Therefore, preparing these statements will boost investor confidence.
Rule number 7 – HAVE THE COMPANY’S MISSION STATEMENTS READY.
#8. Going too big too soon
Someone once said, “It takes 10 years to become an overnight success.”
You need to understand that running a business is like running a marathon, not a sprint. You’ll quickly burn out mentally and run through your resources too quickly if you overextend yourself.
Think both macro and micro and make short and long term goals.
Rule number eight – BRACE YOURSELF FOR THE LONG RUN.
#9. Being too optimistic
Planning only for success is one of the biggest rookie mistake anyone can make. It’s alright to think positive, but to completely discount any possibility of failure would be unwise.
To be successful, you need to try to factor in as many outcomes as you can and have as many contingency plans ready to roll into motion in case of a mishap.
Rule number nine – BE STRICT ABOUT YOUR GOALS AND FLEXIBLE ABOUT YOUR APPROACH.
The decisions you make on day one of your business are the decisions that will have a ripple effect as long as your business lasts. They can also be the catalyst for success or completely derail your ideas. Once you know the common mistakes, you can take action steps to avoid them and start in a better place than your fellow small business peers.