Knowing what mistakes to avoid when starting a new business can save a lot of heartaches — not to mention a lot of unforeseen costs.
Plenty of startups are created by people without any business experience. What might seem obvious to those of us with extensive business experience is not obvious to them.
Seventy per cent of businesses will fail in their tenth year of business (source). We decided to put together this post to help entrepreneurs and new business owners increase their chances of long-term success.
So, we spoke to some of our internal business pros at Start My Business and asked them for some of the biggest mistakes that new businesses make when just starting out.
They gave us fifteen.
You can’t be in business and take no risks. You’ll never grow.
At the same time, the risks you tackle should be as calculated as possible. And you should never take a risk that could destroy your business completely (unless the business is on the way out anyway).
The best way to nail down objectives and set an overall direction is to put together a professional business plan.
An extensive business plan will flush out any issues that need to be addressed to keep the business running.
First rule: You need to develop a thick skin if you want to succeed in business.
Second rule: As thick as your skin is, people who want you to fail should be pushed aside.
When you receive criticism or feedback, determine who it is coming from and what the intent is. Is it intended to assist? Does it come from someone who knows what they’re talking about?
If the answer is yes to each question, you should duly consider what was said to you and use it to improve your products, services, and perhaps even yourself.
No person is an island. As a startup, you will need all the business help you can get!
Markets are not clearcut. They are made of people, and people are always changing.
You need to have a thorough grasp of the market and industry you’re working in. Never assume you know everything.
Even if you’ve been in an industry or market sector all your life, being open to learning new things keeps your mind fresh for disruptive ideas that might shake that market or sector up in ways never thought of before.
If you’re a three-or-four-person show, it would be kind of silly to try and compete with Google.
Premier League teams don’t play with an EFL League Two team for a reason. The League Two team would be annihilated.
“Annihilation by stronger competitors” is one of those golden rules of business that everybody seems to know and yet nobody ever says out loud.
Cash flow, cash flow, cash flow!
Just because you got a massive deal in this month doesn’t mean it’s time to buy everybody a new Maserati!
If there is one thing you must absolutely get to know like the back of your hand it is the concept of cash flow. Money comes in, and money goes out. And the time between it coming in and going out is the essence of cash flow.
“Too much” marketing will never be as bad as no marketing at all.
It’s better to have your name out there than not.
The only thing to keep an eye out for in marketing is that marketing is not being done for marketing’s sake. Marketing’s end-goal is always sales. “Brand Awareness” doesn’t pay the janitor.
So, make sure your marketing campaigns are actually bringing in sales.
When you spend, always make sure that what you’re spending on will bring you ROI.
There’s no such thing as “spending too much” if what you’re spending on will make you more money.
Sometimes, spending too little can be more costly because you don’t spend quite enough to turn a profit on that expenditure.
Good people. Ah, yes, the bane of any manager.
HR is a big subject. Keep in mind that people who are willing to work hard and learn are far more valuable than people who think their skills and experience give them some sort of right and privilege over others.
Hard workers are worth their weight in gold.
How many people downloaded your app last week? Was it more or less? Did you do something about it?
Were sales up or down? Did you do something about it?
Good things rarely happen by chance. They happen because someone monitored key metrics and then made the necessary changes to make it happen.
Every mountain-climb begins with a single step. Doing too much too soon is a sure way to stumble early.
Build slowly. Build stably.
Picking the incorrect company legal structure can end up being quite costly in the end.
This isn’t only related to money. If you have your calculations wrong regarding anything in business, it can lead to some really bad decisions.
Always get good data to base your decisions on.
Businesses can be successful. We know. We’ve opened many successful ones.
And if you ever need any help, that’s what Start My Business is here for. Because if your business succeeds, you’ll tell others about us. And so we’ll succeed.