What are some of the common mistakes entrepreneurs make when starting out? Here is a list of the ten most common mistakes new entrepreneurs make when starting their business. While mistakes made can be our greatest teacher, they can be time consuming and expensive. So here I want to share with you my hard-earned experience and insights I gained from my own lapses in judgment.
1. Without Starting a business
If you are serious about making your new business a success, you must have a written plan. It can be as simple as a single page to get started. Write it will force you to think about how you plan to make your business come to life and also be profitable. Force you to honestly answer such questions as “Who will my customers be”; “Why will they buy from me?”; “How much will I charge for my products and services?”; “How will I get the word out about my new company?”. Be realistic about the cost of running your business. The business will operate as changing the continuous improvement guide for you to follow.
2. Having No management experience
As the founder of a small business, you will be responsible for all aspects of management – finance, marketing, sales, employee relations, dealing with subcontractors and bathroom cleaning, etc. But if you are starting your business because you are super special skills or services, and want to devote all your time and energy to do this, perhaps a family member or spouse can handle most Board of Directors. This person has to share the vision and goals for the company.
3. Sign Help Too Soon
not hire workers until it is absolutely necessary. The cost of hiring help can financially drowning small business very quickly. When you do hire someone, make sure they are diligent and honest. Only hire people that you really need, which will have a positive impact on your business. The home-based in a small business, we try to use subcontractors as much as possible.
4. Hiring Professional Help
Do not skimp on hiring professional advisers as an accountant and a lawyer. Interview several and find a consultant who you feel comfortable talking to. They understand what you are trying to achieve? They are quick to share their experiences and knowledge with you? These experts can save you many headaches and a lot of money.
5. Do not use Cash-GAAP
Under the “cash method”, signing business income when it is received in your bank account. And you pick up the cost when it is paid out of your bank account. Most of us use this cash method of our personal finances because it is much simpler and less time consuming. This is also an ideal method for small and home-based business. Under the “accrual method”, you take business income when it is earned, regardless of when you can get paid for the product or service you sold. And you pick up the costs already incurred, regardless of when you will get around to writing a check to pay for it. The accrual method is too difficult to keep up with the small and home-based business.
6. Do not keep track of your money
You must track your income and expenses each month so that you know where your money is going. You can do this yourself with an inexpensive accounting software, or simply download a monthly statement from your bank and credit cards. Cash flow is the life-blood of a small fledgling company.
7. Not making enough Market Research
This is a very common problem with start-up companies. Market research can take many months and a lot of research to do right. You must know who your competition is, and your customers will be. You must understand all aspects of your industry – inside and out. Read all the books and articles that you can find the specific type of business. Talk to others who are in the industry.
8. Do not make the right Marketing
Every business must have an online presence. It does not matter what business you are in, you have to be online. It is now possible to make extensive and sophisticated marketing for no cost – free. Whether it is a simple website, Facebook, LinkedIn, Tumblr, or online telephone book listing, you will be online.
9. Spend too much too soon
If you are on a tight budget, do not start by spending thousands of business cards and stationery. Do not spend thousands to pay a company to build your website when you can very quickly build a great website on your own. Continue to use these older computer until you have the cash flow and actually need a new computer. Before very large purchases, like a new truck or machine, get advice from your accountant.
10. Giving Up Too Soon
big part of being an entrepreneur is to have stamina, drive, and determination. Do not give up your dream because of a few bumps in the road is an important part of entrepreneurship. Develop intestinal fortitude to weather tough times is necessary if you want to achieve any kind of success. Do not believe anyone who tells you to start and manage a business is easy or simple. It also takes time, effort, faith and vision.