As any successful entrepreneur will testify, mistakes are part and parcel of the business.
However, some can be avoided. In an age where the economy is anything but secure, and the statistics on new businesses are similar, cutting some mistakes out is crucial to your survival chances.
Bearing this in mind, let’s now look at some of the most common mistakes new businesses make – and what you can do to avoid them.
You don’t consider the paperwork-factor
Going from employee to employer is one hell of a journey. It’s one that most of us don’t fully understand until we’re in the thick of things.
As an employee, we’re used to “other departments” doing the legwork. In other words, an HR department takes care of any staffing matters, and an Accounts team will look after tax affairs.
When you launch on your own, all of the above (plus much more) is on your shoulders. The risk is not taking this into account and being left with hefty financial penalties. Another risk is not having the time to focus on the true, profit-driving activity needed to make your business work.
You forget the importance of marketing
In the early days of any business, the focus is on getting things up and running smoothly. Operating in “start-up mode” means there are a million and one things to do and very little time to do them.
Consequently, marketing is often one of the first areas to be neglected. The thinking is that once the business is up-and-running, there will be more time to focus on this. The mantra of “build it and they will come” often takes precedence.
This is a mistake. Marketing should be considered from day one. Why? Because, without it, how will people know that your business exists?
You try to do everything yourself
It can be tempting to take a “hands-on” approach to every aspect of the business in the early days. However, this is rarely sustainable (or advisable).
At some point, you will have to delegate or outsource certain tasks. This could be anything from arranging your professional indemnity insurance to social media.
The key is to identify the areas where you can add the most value and focus on those. Everything else can be delegated to someone else.
You underestimate the importance of cash flow
Another common mistake is underestimating the importance of cash flow.
In the early days of any business, cash flow is often tight. This is perfectly normal. However, it’s important to have a good handle on your finances and to ensure that you have enough cash in the bank to cover any unexpected costs.
If you’re not careful, cash flow problems can quickly spiral out of control, and before you know it, you’re in serious financial trouble. Even if you have a healthy supply of clients, ensure they’re paying on time, and your account is in the green.
You don’t plan for the future
When starting in business, it’s easy to get caught up in the here and now.
However, taking a step back and thinking about the future is important. What are your long-term goals? How are you going to achieve them?
Failing to plan for the future is one of the most common mistakes businesses make. By taking the time to think about where you want to be in 5 or 10 years, you can put a solid plan in place to help you get there.
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