Business

5 Common mistakes to avoid when starting business

5 Common mistakes to avoid when starting business

Starting a business involves many activities related to organizing the organization. The process includes generating an idea for the enterprise, researching the idea's potential for success, and writing a business plan. If you're like many new entrepreneurs who realise the job has limits but starting something fresh on your idea has no limits. But it's worth stepping back and making sure you avoid some common mistakes that plague many new businesses.

1 Having no clear vision

" A clear vision, backed by definite plans, gives you a tremendous feeling of confidence and personal power," Brian Tracy. This should be the starting point for any startup founder, but it is often overlooked. A vision statement is essential to a company because it serves as a strategic plan for success. It can act as a guide when employees encounter challenges. The vision statement also helps motivate employees to work toward shared goals. Having a vision provides a sense of purpose and direction for the business. Your vision will help you define your short and long-term goals, and guide the decisions you make along the way. Without a clear vision, everyone must wait and see what happens next. They have to get assignments and read smoke signals to see which way to go. If your vision statement is too long, forgettable, lacks emotion, doesn't resonate, is confused with your mission and goals, or doesn't exist, you are missing out on one of the best communication tools for creating a positive culture and brand loyalty. People don't buy what you do, they buy why you do it. If your customers believe in your mission- i.e what you believe and where you're going. By focusing on the 'why' in the business we can create much deeper connections with our audience and give our startups a better chance of success.

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2 Launching too quickly

“One of the biggest mistakes startups make is launching before they are ready. The saying ‘Done is better than perfect is the right advice; however, the ‘done’ needs to ensure it can handle new clients. Once you have launched into the public and you start getting clients, ensure your systems and processes are in place – such as payment terms and processes, contracts, and communications – whilst still being able to maintain your marketing strategy. The back-end processes need to be watertight before you start taking on clients; if they aren’t, these are the cracks that will show and appear unprofessional.” – Gems Collins, business coach, Gems Collins LLC Before you begin planning your product launch, you need to understand your audience. Conduct thorough market research to gain valuable insights into who your target customers are, and what they want. This research will form the basis of all other steps in your product launch plan, including your market strategy.

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3 Expanding too quickly

“When you start to see success, it can be easy to assume that growth will continue and the best way to make the most out of it is to simply copy and paste your working formula. However, if you … expand your business too rapidly, it could have dire consequences. You may find your period of growth was only temporary and end up stuck with a bunch of new stuff but no work and no funds to cover them. That’s why it’s important to take a slow and steady approach to expansion and never act on a spur of good results.” – Mark Webster, co-founder, of Authority Hacker Operational inefficiency because uncontrolled expansion will cost your company time, money, and other resources. When your business starts growing quickly, you'll be forced to improvise to manage increased demand for your products or services. It significantly increases the demands on each employee and your team as a whole. This can easily lead to stressed-out employees, low morale, and fighting among the members of your previously unified team.

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4 Partnering with the wrong investors

“An important piece of advice that entrepreneurs should know before starting a business is that their investors are more than just financial backers. A company’s first set of investors will make or break it. These individuals place their confidence in the business’s potential without having a proof of concept presented to them. Once businesses have undergone their seed funding, then they’ll interact with investors who look at the business’s growth and sustainability.” – Krish Subramanian, co-founder and CEO, of Chargebee Competing goals, is where transparency and conversation are critical before any major decisions are made. While two individuals might have complementary skills and get along great together, the partnership is bound to falter if professional goals don't align. One may want to buy single-family properties while the other wants to invest in a multiunit. Ultimately, if the long-term goals don't match, nor do the business plans to reach them, it makes no sense to create a partnership that is bound to be cumbersome or a flat-out fail.

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5 Wasting money

“Handling money incorrectly and being irresponsible with cash flow is a death sentence for startups with limited access to capital. I’ve made the mistake of hiring too many people instead of the right people and spending money to fill the top of the funnel without having a well-defined process to manage the bottom of the funnel. Putting good money to bad use and trying to be everything to everyone instead of being niche-focused is a surefire way to waste valuable time and money, which are the lifeblood to any startup.” – Thomas Aronica, founder and CEO, of Biller Genie. Just the poor tracking of expenses is one of the common ways businesses waste money. Money gets spent, but it goes unnoticed, so your cash flow becomes out of sync. Budgets can be tapped out before people realize and over-expenditure can occur. Marketing is a very difficult thing to master. It’s quite a risky aspect of business, which not everyone may realize at first. The normal conclusion for people new to marketing is that more money spent means more leads, more sales and more profit. This is not the case, as the way you market your business all depends on the products you are selling, your target market and the budget you have at hand. Certain types of marketing will be more effective for one business than another. Your target market may appear a lot more on one type of media than another. So instead of going for the most expensive option, you need to work out which will be the most effective first. Then once you’ve figured this out, you can decide how much you want to invest.

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