When you’re starting a new business, it’s hard enough to know what you SHOULD be doing, much less what you SHOULDN’T. And yet, even if you think you’re doing everything you’re supposed to, you may risk failure with common missteps that could be easily avoided if only you knew what to watch out for. Luckily, you’re not reinventing the wheel here; plenty of other businesses have laid the groundwork for you and you can benefit from their trials.
The only possible way to fall short is if you neglect to learn from those that have gone before. So here are just a few of the most universal setbacks that you’ll certainly want to steer clear of when you open the doors to your new business venture.
- An incomplete plan. As any business owner (or recent business student) knows, you must have a comprehensive business plan in order to move forward with starting an enterprise. There are many reasons for this, but the most important at the outset is to secure funding. Without a solid plan that shows you have done the research and taken the steps to be successful, no lender in the world will give you the handout you need to get your business off the ground. After all, they want their investment back at some point. But keep in mind that this plan must be flexible. Running a business is anything but static and you need to start with a plan that accounts for just about anything so that you are prepared when changes occur.
- The wrong funding. Most people generally assume that this means a lack of funding. And this is definitely a problem for a lot of startups. But considering how many potential sources of funding are out there, you have a lot of options to explore. The bigger problem is business ventures that choose the wrong type of funding. For example, you may have an incredible idea that comes with the possibility of rapid expansion. This could attract the interest of a venture capital firm that is willing to give you millions in startup funds. Most business owners would jump at the opportunity, but you should beware. If you want the opportunity to grow with your business by making your own decisions, you should know that anyone willing to hand over that kind of capital is going to want a say in where it goes, so you could quickly find yourself strung up like a marionette at the whims of your financiers.
- Bad location. Surprisingly, this applies not only to brick-and-mortar operations, but also to online ventures. While “real” world shops have to consider traffic and demographics (as well as the cost of a lease), those that operate online have other concerns related to their web space. You need to ensure that your website is well hosted, meaning easy to find (a great domain name) and always available (no interruptions in service and the bandwidth to accommodate a growing user base).
- Insufficient DIY. There’s a lot you can do on your own to save money at the outset, so if you’re paying others to do everything, you are wasting money! Of course, it’s even worse if you try to tackle jobs that you have not prepared for through education or training. So take the time to gain the knowledge you need to do some tasks yourself, and hire people only when an expert hand is needed to get the job done.
- Lack of branding. Your business sign, logo, and advertising are all part of creating your brand image, but there’s a lot more to the concept, including how you comport yourself with customers and clients and what you give back to the community that supports you. If you haven’t considered how your actions reflect upon your business then you could be creating a negative brand association without even realizing that you’ve engaged in branding yourself.
Evan Fischer is a freelance writer and part-time student at California Lutheran University in Thousand Oaks, California.
- Richard Branson on How to Avoid Common Startup Mistakes
- Do You Have What It Takes to Run a Startup?
- Top mistakes for small business startups
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