Starting a business can be challenging and often marked by a lot of mistakes. Entrepreneurship has been so romanticized that many people forget the hard work, years of obscurity and business mistakes that go into building a successful company. In fact, it’s so tough that few businesses make it past their first birthdays.
Don’t fret, though. You can own a successful business, but for that to happen, there are certain pitfalls you must avoid.
Skimping on a Legal Team
There will be a wide range of circumstances in which you will have standard questionnaires, which means reviewing documents. You may not know what your rights are and how to protect your interests. Before you start up a business, hire a business attorney to help you make important decisions and commit to legal agreements.
Forgoing the Partnership Agreement
Everything from the birth of your business idea to its future as a billion dollar company and in-between is dependent on your partnership agreement. So don’t make the mistake of taking it for granted. From the very start, have a lawyer draw up an agreement between you and your partner. This singular action can save you and your business lawsuits and a great deal of stress later on. Fundera has a great blog article on finding the best lawyer for your business.
Too Many Investors
Every startup needs investors. While you’re preparing to visit investor firms with your ideas, remember to retain an air of exclusivity. Investors like to buy into exclusive concepts, so the fewer investors you visit, the more your exclusivity.
Research and pick your investors well before you present them with your idea. Don’t just throw out a big net hoping to snag a few investors.
A Missing Business Plan
Without a plan or structure on how to run your business, you’ll run it into the ground. One of the first things you should do after having a decent idea is to make plans. Have a business plan drafted from the information you must have gathered on your target customers and from researching your idea’s profitability.
Skipping the Marketing Plan
You could have the best products in the world, and no one would know your business exists because you don’t have a marketing plan. This is a common business mistake.
Don’t just have a business plan outlining the business structure, have a plan to reach your consumers. It’s better to have these two things ready from the get-go.
Having Too Many Expectations
The quicksilver rise to fame of certain startups is to blame for the great expectations that most business owners have. Rome wasn’t built in a day, and neither would your business be in a year. Keep your expectations realistic and numbered so you can focus your resources towards them and feel accomplished when you achieve them.
Reinvesting Everything
Many business owners seem to act like this is the true mark of a long-suffering entrepreneur. On the contrary, it makes your business look unstable when you can’t afford to pay yourself. In the books, it looks like your business isn’t growing well enough to turn out a profit.
Surrounding Yourself With the Wrong People
As stressful as it is to own a business, it’s exciting and fulfilling as well. Most business owners want to get everything done in record time. That’s understandable, but you must apply caution when doing certain business activities.
Hiring people who will work with you is one of them, especially in the early stages of every business. Hiring the right people can give your business a leg up or a leg down. Be intentional and careful with your hiring process. Surround yourself with people who are skilled, able to think deeply and who can contribute ideas to it. Contact us if you would like to talk about hiring a bookkeeper or payroll provider.
Maintaining a Fixed Mindset
Earlier, we talked about having a business plan and why it is vital to have a business structure. However, it would help if you also learned to be fluid. A good business owner has a plan and knows when to veer off. While a plan gives your business structure, remain fluid enough to take advantage of growth opportunities. One of the mistakes business owners make is continuing to do things because that’s the way they’ve always done them.
Not Using an NDA
Ever heard of the saying… “nothing new is under the sun”? Well, it’s true; your idea or invention might be the exception to this rule. As a business owner, you need to protect your intellectual property. Before disclosing any new ideas or inventions, be sure that everyone signs an NDA.
These business mistakes seem a bit too simple, but you’ll be surprised how many business owners make them. Hopefully, you’ll be more careful to avoid any business mistake that could be fatal.
