Nobody ever said starting your own business was easy, but you’re chasing your dream, and you’re determined to transform that vision into a money-making reality. Once you’ve made it past the ideation phase, the hard work settles in. While the excitement of it all will have you wanting to rush through everything, be careful of moving too fast. Before you start earning profits and making an impression on the startup market, you’ll want to learn from your colleagues’ mistakes.
The startup world isn’t for weak-willed—a couple of minor slip-ups could stunt your business, or worse, leave you with a world of worry for your finances and your projected revenue. Although there’s nothing simple about being an entrepreneur, there are a few key considerations to keep in mind when it comes to launching your business.
In this post, we’ll walk you through the mistakes you should be wary of as you forge the way to small business ownership.
Mistake #1: Forgoing the planning process
Believe it or not, the most important foundational elements of owning a business require meticulous planning before you even start raking in revenue. Creating a solid business model allows you to accurately set up processes and forecast your financial planning so that when expected or unexpected things occur, you’re equipped with a backup plan that’s perfectly prepped to handle it all.
One of the greatest errors new companies make during their inception make is being too vague and too indeterminate with the business planning process. When this happens, new businesses can imperil investments and partnerships, essentially nose-diving toward failure with no safety net to cushion the blow. Avoid this harrowing fate by taking your time with the planning process.
So what should your business plan include?
● A detailed summary of your business model
● Thorough market analysis
● A finite description of your product and/or services
● Your marketing and execution strategy
● A financial plan
● Assigning a Power of Attorney for your business dealings should something happen to you
If you’re nervous about spearheading your business plan alone, consider enlisting the help of a business planning professional to guide you along every step of the way.
Mistake # 2: Skipping the market research
Market research is designed to help you determine how potential clients will see your business and help you recognize holes in the current market. With this data, you’ll be better equipped with the knowledge you need to carve out a strategy that puts you on the map and on the pathway to success. Having great market insight assists with limiting dangers when settling on foundational business choices.
Your market research should be led by the following questions:
● Who are your ideal customers?
● Will this market grow or shrink in the future?
● Who are your top competitors? How do your competitors effectively attract customers?
● What type of content is performing well for your competitors?
Doing this essential research before launching your small business can prevent you from having to learn lessons the hard way.
Mistake #3: Underpricing goods and services
You could be setting yourself up for failure if you set your costs too low. This is a common mix-up among new businesses who are either attempting to undermine their competition or fail to complete enough market research when determining their going rate. In any case, charging too little can make it incredibly difficult to cover even the most essential overhead costs.
Mistake #4: Not taking advantage of technology
As a small business owner in the 21st century, you have a myriad of tech tools readily available to you to streamline your launch and fine-tune the planning process. From employee background checks to project management software, there are so many technological innovations that are supremely designed to assist you with handling your workload more proficiently and efficiently.
Though immersing yourself into these new high-tech tools might be intimidating at first, with a bit of time and training, you’ll be able to reap the innumerable benefits faster than you think.
Mistake #5: Hiring the wrong team
There’s simply no denying that among the most defining factors of any small business is the individuals that it comprises. Early on in your small business’s inception, your team is small—but as things begin to ramp up, you’ll need to increase your workforce. In addition to your need to employ people who can deal with a large workload, you likewise will need to recruit individuals who can be trusted to make informed decisions and handle confidential data. If you hire the wrong people, all of your efforts could prove fruitless and set you back rather than forward.
Put in the time and effort toward developing a hiring process that accurately assesses candidates and vets their ability to produce the results you need.
Mistake #6: Not tracking financial goals
As a small business owner, growth is your number one goal, yet it’s easily the most difficult goal to continue chasing through it all. One slip-up that new businesses often make is neglecting to follow financial progress and goals precisely. It should come to no surprise that budgeting is a significant factor that ties into any effective business, enormous or little.
If you’re no master number cruncher, consider using a budgeting software tool that allows you to keep all of your financial documents and data in one safe place.
Consider these top-rated programs:
● FreshBooks
● Sage 50cloud
● FinancialForce Accounting
● Float
Mistake #7: Botching tax season
The most outstanding mistake new startup owners make is forgetting about tax season until deadlines are just around the corner. Regardless of how many tax seasons you’ve lived through, handling each season with mathematical accuracy and level-headed grace is essential to your business’ wellbeing. If you’re always a little panicked about having proper finances and documentation in order, consider hiring a professional tax consultant to take the stress off your shoulders.
In order to stay on top of your federal-scale civic duties, avoid these four common tax mistakes:
1. Not paying quarterly taxes
2. Combining personal and business finances
3. Putting off unfiled tax returns
4. Filing under the wrong legal entity
Final notes
Launching a startup is an undeniably challenging and exciting process—but with a 90% failure rate, it’s no secret that getting your business off the ground is an enigma in and of itself. Using these tips, you can set yourself up for surefire success with your small business!
Author Bio
Samantha Rupp managing 365businesstips.com . She lives in San Diego, California and enjoys spending time on the beach, reading up on current industry trends, and traveling.
