Three mistakes to avoid at the start of your entrepreneurial journey
Studies suggest that up to 100 million new businesses launch globally every year. Running a venture has become more accessible, and more and more people are choosing to embark upon an entrepreneurial journey.
However, it’s no secret that running a business is challenging. The statistics for startup failure make for grim reading but there are many that beat the odds. To boost your chances of success and swerve pitfalls, here are some common mistakes to avoid.
1) Losing control of your finances
Cash flow issues are among the most common causes of business failure. Balancing the books is difficult at the beginning when it’s inevitable to have more money going out than coming in, but it’s vital to keep a firm grip on your finances from the outset.
Set clear deadlines for client payments, make use of resources for bookkeeping and accounting, consider outsourcing if your company expands quickly and keep your expenses in check. Be mindful of your outgoings as well as your income, and use the data you have to calculate profits using an operating profit formula.
If you have limited experience in accounting, or you don’t have time to update the books, it’s wise to think about hiring or outsourcing. If your books are in order from day one, this will reduce the risk of cash flow emergencies and help you control spending and budget effectively.
2) Underestimating the importance of research
Research is vital to the success of businesses across all sectors. Before you draw up a business plan, spend time researching the market, analyzing trends and consumer habits and building an image of your target customer or audience.
Use surveys, focus groups, online polls and interviews to get to know your ideal buyer and make sure you’re aware of your competitors. Use the findings of your research to create a business plan that has a high chance of success. You can use feedback, data and customer opinions and reviews to influence everything from prices and packaging design to your business name and your marketing strategy.
3) Hiring too quickly
Building a team is a critical task for employers to get right. When you hire employees, you want to ensure that you attract the best possible candidates for each role. Spend time working on adverts to ensure that they provide detailed, relevant information about posts and the skills, character traits and experience required.
Use interviews to get to know people and try to focus on finding employees who not only have the skills you’re looking for, but also the personality and values. A strong, cohesive team can make the difference between success and failure. Give yourself time to recruit new members of staff and think about working with a reputable recruitment agency if you’re looking for candidates with specific skills or high levels of expertise.
Setting up a new business is hard work, and keeping it afloat is an even greater challenge. The odds may be stacked against aspiring entrepreneurs, but there are many success stories to try and emanate. If you are in the process of drawing up a business plan, or you’ve recently launched a new venture, try to avoid these common mistakes.
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