You have decided to take the next step in your career and start a business. It is an exciting time, full of promise and potential. You may be finally starting on your journey to independence, both financially and professionally. You are on the precipice of your dreams, but you need to do whatever you can to avoid being one of the many businesses that fail early on.
How do you avoid being one of the victims? There are many steps to take before you can find success and many pitfalls to avoid. When you have your first startup, there is no safety net. You will sink or swim on your own, and even a slight misstep can lead to disaster. To help you reach the levels you have dreamed of, here are five mistakes to avoid with your first startup to help your business survive and thrive.
Not Making a Business Plan
If you decided to go on a road trip, would you start driving without a destination in mind? Or, would you have a destination, but not plan how you were going to get there? Of course not. The same goes for your business. You need a clearly outlined path for how you are going to achieve what you want to achieve.
Your business plan should detail every facet of your business and how you are going to make it work. Who are you going to market your products and services to? How much do you want to spend on materials? What are your cost and revenue projections? You need to have everything down so that you know what to expect when you launch, and you can be realistic about your outcomes.
A business plan is also a crucial part of getting funding. If you seek out investors, they will want proof that your business is viable and will turn a profit for them. Your plan should anticipate questions and cover as much as possible. You may also need a business plan for small business grants from the government or getting a business loan. Everything you do will flow from the plan you create, so make sure that it is as detailed and accurate as possible.
Taking On Too Much
Most startups have to be as lean as possible at first. Budgets are low and margins are tight, and every dollar saved is important. For many entrepreneurs, this means that they have to do as much as they can themselves. This is fine for the most part. However, when they start to take on too much it can become a major problem.
If you plan to work day and night to get all of your tasks done, then you will most likely fail. You might be able to keep it up for a short period, but at some point, you will burn out. Your body simply won’t allow you to continue doing it. Even if you don’t burn out, the lack of rest and regeneration will affect your brain, and you might start to make mistakes.
The key is to take on as much as you can and find others to do the work that you can’t. You will need to balance between your financial budget and your time and energy budgets. If you can’t afford to hire someone, then outsourcing is always an option. That way you don’t have to pay for the hours they work or for each project. Whatever you do, take the burden off of yourself so that you have the energy to take your business to the heights you want to reach.
Lawsuits
You might think it will never happen, but the truth is that businesses get sued every day. You could find yourself in a disagreement with a partner, your competition, or with a client. Someone could get injured on your property and decide to take legal action against you. Even if your business was not at fault, it can take years and huge legal costs to get everything sorted out. This can end up costing thousands and thousands of dollars.
You need to get your business coverage early to make sure you are protected. It will cover your legal costs as well as any damages you might be ordered to pay. You should also get commercial property insurance to protect against natural disasters and vandalism. Talk to an insurance professional to make sure that you are protected against all of the possible risks for your business.
The Wrong Teammates
Unless you are going to go it alone, then you need a strong team around you to find success. Making a mistake with your initial hires could lead to disaster. You want employees to be bought into your vision and easy to work with. Never underestimate the power of a motivated team with the skills you need.
Not only do they have to be dedicated to your success, but you also need the right mix of talent. Make sure that while you are developing your business plan, you identify what skills you will need to have on your team to handle your daily operations. Then, when you hire, make sure that you hit all of those skills with your candidates. Anything you are missing could end up being a glaring hole that will sink your business as time goes on.
Not Learning From Mistakes
Every first-time entrepreneur makes mistakes. Every long-time entrepreneur makes mistakes, too. You won’t be perfect the first time out, which means that you have to make your mistakes valuable to you. If you keep doing the same unsuccessful things over and over, then the risk of bankruptcy quickly looms.
When you make an error, take the time to identify why you made it and what actions led up to it. A little self-reflection will help you avoid the same issue in the future so that your business and brand will be stronger. No matter how devastating a mistake might be, there is always a way to learn and grow from it.
Starting a new business is hard. You need to do whatever you can to make it easier on yourself. By being aware of and avoiding these five problems, you will have a great chance to achieve success with your business and reach all of your goals.
