You have an idea for a new business and the wheels are in motion. You are certain that this is the business idea that will change your life and you are ready to take the next step. As an entrepreneur, you are aware of all the risks but are also encouraged by the potential financial reward and success. There is no official entrepreneurial handbook to follow to ensure your idea will take off, but there are several big mistakes you can avoid when getting your business off the ground.
¬†Not having a business plan
A business cannot survive without a detailed assessment of all of its requirements. Before launching your business, write up a business plan complete with long- and short-term goals, financial objectives and projected overhead costs. Ask and answer all of the questions you may have, such as:
‚Ä¢What obstacles will you face?
‚Ä¢How will you raise capital?
‚Ä¢Where do you see your company in the future?
A business plan is the best way to flesh out all of the details before taking all of the risks. Potential investors will also want to see your business plan before making any decisions to support your endeavours. A detailed business plan will not give you a glimpse into the future, but it will help you determine if your business will have legs.
Focusing too much on your product
You love your idea. You may care for it as if it was your own child, but you need to consider sales, marketing and promotion ideas once you are ready to move forward. Ask yourself: ¬†Who will buy your idea? Is there a large enough audience interested? How will you reach them? Do you need to tweak your idea at all to give it more mass appeal?
As an entrepreneur, you need to consider all aspects of your business and not just the idea itself. Take a step away and try to look at the business objectively. Find your niche, find your audience, and get your message out there.
¬†Making it all about the money
You may have received a generous amount of funding from investors, or there may be an initial burst of interest that sparks new found cash flow. Still, you must remember to stay within your means and think before you spend. Pay your employees, cover your costs, pay yourself (enough to live and eat), and then reassess.
Reassessing your business means you should consider: ¬†Hiring more employees or scaling back, looking at your overhead and see if it needs any adjustments, upgrading your technology and increase your advertising budget.
If you are experiencing good fortune, reinvest into your business so it will thrive. The new car, new house, over-the-top advertising campaigns, extravagant client parties, and lavish vacations can wait. Take care of the business so it will take care of you.
¬†Hiring the wrong people
¬†Your good friends provide you with support, camaraderie, advice, and even good business partners. Conversely, your friends may not always be the best employees.
Your best friend may know the best jokes, but does he know anything about marketing? Can he handle the finances or the advertising?
The best businesses hire the best-qualified employees, so take careful consideration in how you staff your company. Starting your own business is not a game.
You should be able to enjoy the process, but not at the expense of losing everything by making poor employee choices.
Hire friends with the strongest qualifications, employ the right applicants for other positions, and keep your other friends on hand for moral support.
¬†Ignoring the legal aspects
Early on in your venture, you may unwittingly make legal errors. As your business progresses, these issues can snowball and create even larger, insurmountable problems that will deter success.
Hire a qualified attorney at the onset and let him/her address all of your legal concerns. Your attorney will be there to answer your questions, deal with the legal problems, and navigate your business through any choppy waters.
You will inevitably have missteps along the way, but learn from the mistakes and use them to improve your business.
Know that you have done the research, made the best-informed decisions, prepared yourself sufficiently, and once in a while allow yourself to let the chips fall where they may and then react accordingly.