Starting a business is an exciting process full of opportunity, but also full of pitfalls. When starting out, the famous quote from Benjamin Franklin in a good one to live by: by failing to prepare you are preparing to fail. There are a lot of considerations to be made in business and a lot of skills needed – not all of which you will have at the outset. There is no one way to succeed in business, nor is there one way to fail in business; however, by looking at where other would-be entrepreneurs have failed before you, you can learn from their mistakes and improve your odds of success.
Failing to Plan
You may be eager to get your product or service out there, and start earning, but before you do anything, you need to put a business plan together. This might not be the most thrilling exercise in the world, but can save you from a world of mistakes further down the line. A business plan will help you focus, and keep your imagination from getting away from you. The main aims of your business plan are to manage your cash flow by figuring out your funding, how much you expect to take in from sales and how much is going out; you also want to map out the future, setting out your goals and your growth strategy. Having a business plan will not only help you stick to targets and plan for the future, but will also be vital if you wish to start securing loans or investment.
Not Seeking Mentorship
Running your own business can be hugely rewarding, but it can also be a solitary experience, especially if things start going wrong and you have no one to turn to. Confidence is great when starting out, but it is foolish to believe you can do it all on your own. There is a lot of help out there for fledgling businesses, with a lot of it being offered up for free. Try searching in your area, either online or through networking events, for possible mentors – people who have worked in your industry and have experienced the process of starting their own company. A mentor will not only act as a sounding board when you need to vent – which can be incredibly important – but can also introduce you to the right people, point out issues you may have overlooked, and be your champion even when you begin doubt yourself.
Not Understanding the Market
You may know your product/service and the related industry inside out, but do you fully understand the market and your demographic? A big mistake when starting out in business is focusing entirely on your product and service and believing that because you love it, everyone else is sure to love it. Market research is crucial and will not only let you know if there is an audience for your product or service, but will also help you in securing funding and investment. When carrying out market research it is important to set out your objectives and know what kind of data will be important to you – aim to find out what your demographic thinks of your product or service, what they would be willing to pay and what their needs are. Doing this kind of research will not only prevent you from putting lots of money into a business which doesn’t have potential, but it will also help you decide on the pricing strategy and spot any areas for future growth.
Failing to Protect Your Business
With so many things to think about when growing your company, it can be easy to overlook the less exciting aspects of running a business. Your business idea might just be incredible and unique, but that won’t remain the case for long if you don’t protect yourself. Ensuring that your intellectual property is protected – from your product idea, trademark and trade secrets – will allow you to pursue anyone in court who illegally infringes on your rights and tries to replicate your ideas. It also important to ensure that anything you are doing isn’t infringing on any other business’ rights – remember to check that your business name and logo are not the same as or similar to any other business. Another important thing to remember is to insure your business, especially when working with the public. No matter how careful you are, from barbers to salons to restaurants, accidents can happen which could result in your business owing large amounts of compensation; having your business, contents and employees covered will help your business financially should anything go wrong, giving you a much greater chance of survival.
Not Getting to Grips with Marketing
You’ve done your market research, got your product perfected, your logo is looking slick and your website is up and running, but now you need to somehow make people aware your business exists. When it comes to marketing, the key is to be confident and look for help if you unsure of what you are doing. Your market research should have helped you figure out who your core demographic is and where they can be found. Write down your marketing budget and goals and decide whether you need to be advertising on Google, social media, in print, via word-of-mouth, at trade shows etc. Once you know where you need to be marketing, come up with a strategy and decide whether you need to seek outside help. Whatever you do, don’t assume customers will just find your business on their own.
Get to Grips with Your Budget
A positive cashflow is the lifeblood of your business and by not keeping a close eye on your budget, you could be seriously putting the future of your company in jeopardy. Set out your budget carefully in your business plan and try your best to stick to it; unforeseen expenses inevitably pop up, but by keeping to your budget in all other areas of your business, staying on track shouldn’t be too difficult. If you are bad with finances, find someone who is good. Having someone in your company who has strong bookkeeping skills will not only stop you overspending, but will also help you keep on top of everything from your taxes to your unexpected outgoings. Use your budget as your measure of success – are you where you hoped to be or are you way of the mark and, if so, why?
There is no one way to start a business and there’s no fail-safe method, but by learning where many others have gone wrong in the past, you better your chances of success in the future.
