How to Avoid Huge Mistakes When Starting a Business

Did you know that 20% of new companies fail within the first two years, and about 50% fail by the 5th year?

But business failure is easy to avoid by reviewing the mistakes others have made over the years. Below are some of the top blunders you will now know to avoid, so your business will succeed!

Don’t Fear Failure

Everyone wants to succeed in their business, but many successful businesses do fail here and there. What matters most is how you react after the failure – whether a new product does not sell or your original idea doesn’t pan out. Pick up from that failure – it may be the key to your future success!

Write a Business Plan

Many small businesses get rolling without a business plan. Without a plan, failure is more likely. If you are beginning a startup, map out your business plan. Even if it’s just handwritten on a sheet of paper, having a plan is key. It should include the cost of operations, how much you plan to sell in year one, and who will buy your product or service, and why.

Know Your Market And Audience

A common blunder is skipping the time it takes to understand your customers and market. Writing Python or R is easier for a software coding expert than glad-handing with customers, but you need to know if you are on the right track by getting feedback from people.

Building a fantastic product does not always translate into business success. You might focus on too small of a niche or build a too pricey product for your market.

Don’t Be Superman

Do not try to do everything yourself. Find advisors you trust to talk about business ideas, progress, and challenges. One idea is to encourage four or six people to join your firm as advisors. That way, you will get regular feedback, so you don’t make as many avoidable mistakes.

Another idea is to bring in one person at least part-time to handle administrative and clerical tasks. Getting training in Excel and other productivity tools is affordable and easier than ever. Letting that person handle those administrative chores can free you to be more creative and focused on big-picture things.

Choose The Right Investors

Many experts say a company’s initial set of investors will make or break the organization. These people are putting their confidence in the business without having proof that it will fly. Once businesses have gotten their initial funding, they can work with investors who will review their sustainability and growth.

Don’t Waste Cash

Mishandling your cash may be a death sentence for a startup with limited funds. Some small companies fail because they hired too many people rather than the right people. Avoid putting good money into bad uses, and your company is much more likely to thrive.

Don’t Undervalue Your Offerings

Many entrepreneurs tend to price their products or services too low when they open their virtual doors. Do not price too low to grab market share. Also, do not give away valuable products and services for free. While it is important to be a good steward and help others, you do not want to give away too much free stuff. You need to get cash in the register, so make that your focus from day 1.

The Bottom Line

We all know that many small businesses fail. But the great news is many of the problems can be avoided by following the guidelines we highlight here. Good luck with your new venture!