Preparing, launching, and running a new business is difficult enough. You don’t want to put more obstacles in your path by making easily avoidable mistakes. Every business owner is bound to meet challenges and pitfalls. If you want to give your exciting new idea its best chance of success, you must know the potential risks and how to navigate problems. Below, Sam Marcus from bizbenefitguide shares seven tips on what not to do when starting a small business.
1. Establishing the Wrong Legal Structure
Every type of business operates under a legal structure, and you want to ensure that you intentionally establish one that will meet your company’s needs. For instance, you could have pass-through taxation, set liability protection, flexibility in management, and many other perks by forming an LTD company (or LLC in the US).Â
Since each country enforces regulations on LTDs, you will want to understand the rules before going through the process. If you want to save time and stress, hire a formation service or an attorney.
2. Not Considering All the Costs
You understand that starting a business is not free. But if you are like many other entrepreneurs, you may not know precisely how many costs are involved.Â
Take time to research and list all the startup expenses you can expect. Items might include financing, licenses and permits, equipment, insurance, inventory, marketing, utilities, etc. Once you know the costs, create a budget to help you start strong.
3. Trying to Do Everything Yourself
Many entrepreneurs neglect to hire people early on because they can save money by doing everything themselves. The problem with this approach is that there is only so much time in a day, and many of your business tasks may require skills and expertise that you don’t have.
It’s easy to see how overcommitting can reduce efficiency and cost you more money in the end! Leave room in your budget for hiring professionals to take care of tasks when necessary.
4. Not Solving an Actual Problem
Even if you love your business idea, it must solve a real customer problem if you have any chance of succeeding. Spend time researching your target market and ensuring your offering is tailored to meet your customers’ needs.Â
5. Never Stopping
Your passion can serve as great fuel for staying motivated in the good times and bad. But if you don’t allow yourself room for rest, you will eventually burn out and maybe even damage your personal and business relationships. Establish clear, realistic goals that you can accomplish at a reasonable pace, and be sure to leave time for leisure and your most important relationships.
6. Forgetting About Marketing
A quality product or service can take you far, especially if you rely on a local market. But it’s essential to recognize how much competition you are dealing with.
For customers to choose your business over others, you must have an effective marketing and branding strategy. And you must ensure that you have the necessary funds to build recognition in the marketplace. Marketing and branding will go a long way in helping you reach new customers, and maintaining a quality product and service will allow you to build trust.
7. Assuming That Buzz Will Last
When you come out of the gate strong during your launch, you will ideally experience a lot of attention on social media and other channels. You may even have a lot of customers coming through your doors.
If you hope to pay your bills and start making a profit, you must focus on the long game. Embrace the initial hype of your new business, but don’t rely on it. Concentrate on building a sustainable business model and scaling the healthy way.Â
Starting and managing a company is hard, and you don’t want to make it more complicated by making the mistakes that so many entrepreneurs before you have made. Be aware of the mishaps above, and find ways to avoid them as you strategize your launch. And keep looking for other pitfalls that you should take care to avoid.
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Written by Sam Marcus from bizbenefitguide.com
