As of 2016, nearly 14% of Americans have started or run their own business.
However, every business makes avoidable mistakes when first starting out. While some are generally harmless, others can be detrimental to the health and well-being of your company.
Let’s get into some of the major mistakes you must be aware of when planning out your startup.
Sure, it sounds cliched, but it’s still a real obstacle for most entrepreneurs. Fortunately, many very successful business owners failed plenty of times before landing their wins.
Don’t get discouraged. If you believe in your idea and your ability to execute this plan, don’t let any negativity or fear-mongering stop you!
Avoid getting lost in your own thoughts or comparing yourself to others. Instead, just keep moving forward.
Startups undoubtedly cost money — you already know just how much.
Most people think (and worry) about the big expenses. However, they neglect all the small, incremental charges that come with owning a business. This includes things like marketing, hiring processes, lawyer fees…the list goes on.
Keep a meticulous budget, modify as needed — and above all, stick to it.
Having an Undefined or Wrongly Defined Target Audience
Whether you are selling photography or even cheesemakers, one of the greatest avoidable mistakes is misunderstanding your audience.
Knowing your consumer base allows you to target your advertising appropriately. It also helps you to reach out to the people who are most likely to benefit from your services.
It is important to continuously track data and demographics to obtain this information.
Confusing Company Infrastructure
If you run a company with several employees, you need to solidify the organizational structure. Each employee needs to know who he reports to. They also need to know how communication is broken down within the industry.
Any ambiguity in this structure faces the risk of conflict and tension within the workplace.
Paying Yourself Inappropriately
It’s common for entrepreneurs to pay themselves either too much or too little. Both of these avoidable mistakes can be costly.
A good rule of thumb is to pay yourself a set percentage of revenue. As your business grows, this can be adjusted as needed.
Hiring the Wrong Employees
Be cautious when you begin your hiring process.
It’s easy to feel like you need to hire the first candidate who sends you a resume (especially as work piles up.) However, you need to be considerate of your needs.
For example, do you need a full-time employee or can an independent contractor or part-time individual do the job?
Also, just because someone makes for a great coworker does not mean they will make a good business partner!
The greatest ideas in the world may not launch without the right number-crunching and hard math.
Before launching any business, a certain amount of research is required (even if it’s as obscure as LED eyelashes.) This means determining your service or product’s current competition, the current demand, and the trends within your industry.
You will also benefit from collecting your own business data and making alterations to your business plan as needed.