Starting your own business can be quite an exciting venture. You get a chance to exercise your creativity and create your own path in a way that no other job will. However, even with the freedom and ability to make your own way that this venture provides, hundreds of businesses fail each year. Starting up a brand-new business is also hard work, and there are some crucial things that you must do to avoid becoming another start-up that flops within the first couple years. While some of these things may seem common sense, they have proven to be the things that trip up more businesses than almost anything else.
Having a Boring Name
The name of your business is the first thing that customers will use to form their opinion of you. Nothing is worse than having a name that is misleading or that is boring. It’s okay to have a name that is descriptive, but a catchy name is even better. When coming up with a name for your business, spend some time researching the different naming patterns that other businesses have used. This will also help you avoid trying to use the name of another business. You can use imagery, common sayings, puns, or synonyms to spice up the name of your business as well.
Picking the Wrong Business Entity
While there are advantages and disadvantages to each business entity, there will likely be one that works the best for you and your company. Take time to do your research on each of these structures and review the pros and cons of each of them. You may also want to talk to a legal advisor to gain a clearer understanding of how different things will affect your business. For example, a sole proprietorship might seem like a low maintenance option now but as your business grows, it can limit you. While it is possible to change your business entity, it can be costly and time-consuming. It is best to make sure to choose the right one from the start, especially as this will have an impact on your taxes.
Not Being Flexible
In business, as in life, things change constantly. Refusing to adapt to these changes can be very harmful to a company, especially a startup. When you enter a new industry, you may not be aware of everything that you are going to have to deal with. As you gain new customers, you are going to face new challenges is catering to them. In order to not fail, you need to have some flexibility in your methods. Be willing to alter your ideas based on the feedback you are receiving and know when you need to stand your ground. Don’t discount a potentially lucrative opportunity just because it was not in your original plan or you don’t think you currently have the resources to handle it. Be willing to step outside your box and try new things.
Not Being Aware
It is important to be aware of the areas that you are strong in, but it is more important to be aware of your weaknesses and to have a plan to compensate for that. Failing to recognize your weaknesses or failing to adequately compensate for them is one of the biggest risks for your business. It can be very helpful to hire people who excel in the areas that you struggle with. No company can have everything run by one person. You should also take into account your personality and how that will affect your ability to run your business. You may enjoy the process of running the company but find it hard to deal with clients. You will want to make sure that you come up with a way to deal with this or find someone who can handle your client interactions.
Being a Perfectionist
There is a difference between being detailed oriented and being a perfectionist. Of course, you want your new business to be as great as it can be, but your perfectionism can cause more problems than it will solve. The more you nitpick at your product or service, the longer it will take to launch. Not only will this cause you to lose money, but also increases the likelihood that another company will snag your idea. If you work in a highly competitive industry, it is always best to get your product out there quickly. Once you launch, your company will be given a real-world test. You can easily determine what is working and what is not. After all, the point is not to start out your business perfectly, it is to always be improving.
No matter how great your product or service is, you cannot expect people to find it on their own. By not investing the energy and money into proper marketing, you are doing your business a disservice. With so many businesses out there today, yours can easily get lost in today’s overcrowded market. You must make a real effort to get your product into the hands of the consumers. Remember, a bad product that is marketed well will always do better than a great product marketed badly.
However, as a small business owner in today’s digital world, you are incredibly lucky as there are many opportunities for cheap and even free marketing. With the social media, web content, and SEO, there are plenty of tools readily available to you. If you are not knowledgeable this area, however, it may be a good idea to hire someone who has experience in SEO to handle all of this.
Let’s be honest, there are a million money mistakes you can make when first starting up your business. However, two of the most common money mistakes are not saving enough money or mixing personal and business finances.
Failing to save money before launching your company is a frequent problem for new business owners. Though you may have your business plan all laid out and you intend to be turning a profit soon, it can take a long time before your business becomes profitable. A very limited number of small businesses make a lot of money right away. Additionally, if you are leaving a full-time job to create your company, you can expect to make considerably less than your current salary. To do what is best for you, your business, and your family, try to save up as much money as possible before you leave your current position.
You also want to avoid combining your personal and business finances. Be sure to open a new business bank account so you can keep your finances separate. This way, you won’t get into any trouble come tax time. You will also avoid having your personal savings spent on business expenses. Many people think they can combine their finances and carefully track everything. However, this most often ends badly. Avoid an audit all together and create a business bank account.
While it may seem overwhelming to try and avoid all of the mistakes that can come with starting a business, don’t be afraid to try. Surrounding yourself with the proper resources, looking ahead, and doing everything that you can to prepare yourself will put you in the proper position to enjoy starting something new. After all, nothing ventured, nothing gained.