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.
- Save Money While Going Green With Arcadia Power - July 25, 2019
- 3 Compelling Reasons Why Your Tech Startup Needs A .TECH Domain - June 21, 2019
- Maximize Team Productivity With Project Management Tool monday.com - August 22, 2018
Robbie Gray says
For instance, say you are not good with money, but you have a great idea for a business and it does well. Do you hire someone to manage your budget right away knowing that you do not have the education to do it the right way?
Tiffany Oneal says
These are actually 7 reasons that I am afraid to start a business!
Ivy Moreno says
The key term here is “avoidable”. Yes, all of these are avoidable, however, when you are starting a business, you are not thinking much about these until it is too late. Its the ones that recover that become successful.
Marjorie Cortes says
For when you start out with a new business, I think you can easily go with just a part-time contractor for some of the duties before deciding they have to be full-time.
Martin Ferguson says
I think that if new companies are paying the CEO, President or Founder a percentage of the revenue, that is a pretty safe way to go. Some of these guys feel like they are owed millions of dollars and that just does not make sense to me. Especially when you are trying to raise funds to keep a business going.
Eric Harris says
When I first started my own business, the small costs, like you mentioned, got me. I was unable to get my head around the small expenses because I was too worried about the large ones. It is a roadblock you must get around to be a success.
Robert Messer says
What do you think is the first professional type hire that you make? Accountant? Manager of sales, or ?
Joseph McKeown says
Oh, that is a great question. Just thinking about it now, even though I do not own a business, I would think you start the process with a good manager of some type. Right?
Elnora Middleton says
How does a new startup that is well funded decide on what to pay?
Toby Warren says
Startup pay is always something that makes me wonder. Now, I know that Shark Tank is not something to use as a gauge all the time, but that question about CEO pay does come up once in a while. It makes you wonder.
Beula Ray says
I am not 100% sure that you can weed out the bad employees, during the hiring process. If you have some sort of probation period or something like that, you will have some space about it.
Allen Sanchez says
You cannot, but that is why you need to have a good, efficient documentation system in place. If the employees are not working out for you, show them the door per your policies.
George Carr says
One of the things that has always scared me about the fact that you can start a business, is making sure you have the money to do it. The budget has to be the hardest thing to plan for, or at least, the one thing that is the most important part of the planning process.
Glenn Wright says
Startups just need to take things slowly. A lot can be accomplished right away, but when those things are not the RIGHT things, your business suffers
Jason McNamara says
Sometimes I think that new businesses end up hitting these steps because they take off so quickly and somewhat out of control. These are good things to keep in mind each day when you start so that your business is not impacted by them in a negative way.
Essie Moss says
Even when you find your target audience, you have to keep in mind that can change as well. Over time, depending on what you are selling, that can change with the seasons. Knowing who you are selling to is the best way to sell to anyone.
Larry Lopez says
Exactly. Some of us find our target audience by mistake and then we are not sure what to do with them. We have to make sure that we are still selling what they want to them. Tracking them down and making sure we are putting products and services right in front of them is only half the battle.
Vanessa Kennedy says
Is it just me or does it seem like it is very easy to want to start a business, but not very easy to actually get that business started?
Margie Cruz says
While it might seem that it is easy for some, there is still a learning curve to the process. I think that there are a lot of businesses that do not do well and are just lost due to some of these factors.