Starting a business can be difficult to do to say the least. You will need to face the challenges that come from building a company from the ground up, and you will also need to make sure that you gain as much experience as possible in the business world. This will involve handling your finances as well as handling your team. The main issue is that a lot of start-ups experience the misfortune of failure, if they ever manage to launch at all. If you want to make sure that you are not one of them, then this is the guide for you.
Going at it Alone
The main thing that you need to do is avoid going at it alone. How many start-ups do you know that have met success with just a single founder? Sure, establishing a company is hard work, and at times, you may feel as though you have your vision and you know what you want. This may be the case, but at the end of the day, you still need to rely on others for help. They will help you through the highs and lows, and they will also be able to help you deal with tough setbacks. This can make it hard for you to carry on without the encouragement of a good support network. You also need to take the time to market your plan and to also build up your product or your service. Money has to be raised if you want your company to be successful. In most situations, this will become harder to do if you are working alone, so make sure that you have the right support network if possible.
Not creating a Business Plan
Having a solid business plan will play a huge role when it comes to determining your future success. A business plan will ultimately guide your start-up, and it will also help you to meet the goals that you have set for yourself as well. You need to think about your potential customers, and you also need to think about their missions and values. It’s very helpful for you to explore the direction you want to push your company in, and you need to think about your competitors too. How is your company going to measure success? There’s no need for you to create a business plan in a super formal manner, but at the end of the day, you do need to have something that will help you to determine your company’s direction over the long term if possible.
Not Handling Money Properly
Handling money is super important. One of the main mistakes that people make is that they spend too much. This can happen when a business owner or a founder becomes too eager and they hire a lot of people. At first, the business owner may believe that new team members are 100% needed, but this will burn through your start-up’s finances. If you want to avoid this, then you need to try and hire people who you need and take staffing one step at a time. Make sure that you hire one team member, see how you go and then hire another. Sure, you may think that you need two right now, but hiring one may be a good stepping stone for you to see where you stand overall.
If you lack the ability to pivot, then this will also work against you. Every entrepreneur out there will tell you that nothing will ever go as planned. Being able to pivot is a huge part of the game. At one point, Nokia made rubber boots, and they owned a paper mill. In this day and age though, they are one of the biggest telecommunication companies out there. Odeo were once a podcasting service, but when Apple launched their own, they were forced to pivot. In this day and age, Odeo is the social media site that is now known as being Twitter. If you want to become a good business owner, then you need to have a backup that will help you in the worst-case scenarios. You also need to be flexible, and you need to rethink your original proposal if you don’t think that the one you have now is going to work.
Not Thinking Big Enough
If you think too much outside the box, then you may find that success is even harder to achieve. The main mistake that a lot of business owners make is that they think it’s a good idea to target a smaller crowd as they believe that competition isn’t as fierce. If you make anything good, then you are going to have a lot of competition. This is something that you need to deal with. If you try and avoid competition by targeting a smaller market, then you may find that you end up compromising and stunting your own business growth.
Choosing a Bad Location
Choosing a bad business location will also work very much against you. You have to set up your company in a good location, and you also need to consider the geolocation of your customers too. Consider the fact that a lot of tech companies tend to emerge from various tech hubs, which may include Silicon Valley, Portland, Seattle and Boston. There’s another reason why location is so important. Venture capitalists. Most venture capitalists will only give money to companies that are around an hour away from them. This is because they usually hear about start-ups from someone else that is already in their network. If you want your business to get funds, then make sure you set up shop close to where the money is.
Ignoring your Hunch
There truly is nothing like the instincts of an entrepreneur. It’s the reason why some company owners end up being able to go the full distance with their business. If you want to help yourself, then you have to make sure that you do not ignore your hunch. Use it to your advantage and listen to your gut where possible. If you want to make the most out of your hunch, then you need to make sure that you crunch numbers and that you view your key performance indicators. This will show you if your hunch is a good one, and it will also help you to develop your business strategies for the future.
Launching at a Bad Time
When you launch a business, you have to know that timing is absolutely everything. Even though there are some circumstances that are out of your control, including the economy or even a natural disaster, you have to know that launching at the right time is so important. Make sure that you do not launch too early or that you wait too long. If you end up launching too soon, then you may end up putting your entire enterprise at risk. If you launch too soon, then you may find that you end up struggling to keep up with your company progress, which is the last thing that you need. If you want to expand but don’t know if now is the right time, then make sure that you listen to your customers and that you also take the time to explore what your competition is doing. If you can do this, then you will surely benefit.
Hiring the Wrong Team
Another mistake that most failed entrepreneurs make is that they get the hiring process wrong. You have to make sure that you don’t start the process too quickly. If you do, then you may find that this drains you a lot financially. So many companies fail simply because they hire people who are not right for the company. It may be that they hire a friend who does not have the proper skills for the role, or that they hire someone who doesn’t fit in with the team because of a personality mismatch. You also need to make sure that everything is documented if possible. The last thing that you want is for an employee to sue you because an agreement was only sealed with a handshake.
Not Taking out a Good Insurance Policy
If you do not have a good insurance policy then when things go wrong, they may end up going very wrong. It may be that a client sues you because you did not provide them with the full service they asked for, or that one of your workmen get injured because of an accident. Either way, having a solid policy is crucial to the success of your business. If you’re running a labor or construction business, ensure that you have contractor insurance. If you’re running an office on the other hand, having buildings cover and business insurance is a must.
Having Too Much Influence
It doesn’t matter whether someone is influencing your company or whether they are giving you a lot of criticism or feedback because this is useful. If you focus solely on the opinions of others and never listen to yourself however, then this will work against you, and you may even find that you end up struggling in the future to steer your own ship. If you want to do something about this, then you need to take on board the advice of others, but at the same time, you also need to make sure that you listen to your gut. If you can do this, then you can strike that fine balance.