Starting your own business may seem the ideal way to take more control over your life, and many entrepreneurs have started small and made it big. However, it’s also the case that a large number of start-ups fail every year, so when you’re considering what’s best to do, you need to be aware of the mistakes that many people make that lead to a business failure.
There are some common mistakes that would-be entrepreneurs make. Here are some of the pitfalls to avoid if you want to be successful.
You’ve got your idea, and you think you’re ready to roll. But wait, how prepared are you really to run your own business? It’s going to take up a lot of your time, more than you might imagine. Explain to family and friends what you’re going to do so that they can be supportive of your vision. Without that support, you might find relationships fraying, and you have to take time to mend fences.
Above all, you need a good business plan that outlines your vision and explains how you intend to carry that out. Develop your financial plan in tandem with your marketing strategy and show how you plan to manage your processes, whether it’s making a product or offering services. If you need to raise finance from a bank, you’ll need your business plan to show that you have thought everything through and have a great opportunity to make a success of it.
Don’t mix up a business with a product
If your product is a one-off that people won’t come back for again, then you don’t really have a business. You should be looking into potential revenue streams that will make customers come back to you time and time again. It could be for product upgrades, new products that fit with your original ideas, or an advance in technology that could be licensed elsewhere. Think of the long-term rather than the short term to give your business every opportunity to grow.
Pay for expertise
Nobody is good at everything, so be realistic as to what you can do well and what you might struggle with for your start-up. In particular, you may well need financial assistance to help you find your way through the thickets of rules and regulations that have to be obeyed. It’s so easy, for example, to make mistakes over taxes, so hire a professional, to begin with, to keep those financial affairs in order.
An advisor can also help you with understanding the terms of loans so that you’re not left high and dry if something goes wrong, and they can also advise what type of insurances are right for you. You may have had HSBC PPI, Payment Protection Insurance, or be considering it, and you need to know how appropriate it was or will be for you.
You may also need support with setting up your business website, and though you can do it yourself, you can get a highly experienced designer who may cost up front but will give you a powerful marketing tool for the future.
Look at your data
It’s easy to ignore data because you think your idea is so good that it will take flight on its own. That’s a mistake – though you may believe that you will succeed, you need to do some number crunching that will validate as far as possible that your plans will work in the real world. Data gives you more control over where you are going and also helps you decide if you need a change of direction or you need to do something differently.
Don’t grow too quickly
Many businesses fail because they try to scale too quickly. There are times when you need to consolidate and not spend money on things that you don’t need. If you have prepared your business plan properly, you will have set milestones, and your plan should be flexible and change where circumstances change, it’s better to take a step-by-step approach to your growth rather than rush into it just because you think it will work. It could, but be cautious and build a solid foundation for that growth.
Every entrepreneur wants to run a successful business, and it’s perfectly possible to do well if you avoid making too many mistakes. Even if you do fail, you can chalk it up to experience. Consider that you ran an experiment that didn’t work this time around but has given you a lot of background and knowledge for your next venture.