Few endeavors are more challenging or create a greater sense of accomplishment than starting a small business. However, a recent article in Entrepreneur offers valuable insight into the most common mistakes people make when doing so.
Here are six critical pitfalls to avoid:
1. Not preparing for the impact on the rest of your life.
Starting a business requires you to invest considerable amounts of personal time, attention and effort. It may place a strain on your relationships with loved ones. It may cause you to lose a certain amount of sleep, and it may place temporarily drain your bank account. You need to be mentally and emotionally prepared to tackle these challenges before they arise.
2. Assuming that selling one good product is enough.
To successfully launch and sustain a business, it takes more than one great product. After you sell that product to your customers, what happens? Will they have the impetus to return to your company for other products or other services? A successful business is able to capture repeat customers or have a realistic plan for longevity and growth.
3. Cutting costs by eliminating professional counsel.
Yes, it may be tempting to save some money upfront by not hiring a financial consultant, tax expert or business law attorney. However, going without professional assistance can potentially shipwreck your company. Legal requirements and tax codes are highly complex, and one mistake could potentially spell the end of your business or its profitability.
4. Expanding too fast and too soon.
As soon as your business begins to make money, you may be tempted to spend that money on legitimate-sounding business expenses. For instance, you may want to hire more employees, or rent a larger office space or begin a larger marketing campaign. However, beware attempting to scale your business too quickly. One report suggests that the majority of failed startups are sabotaged by this key mistake.
5. Ignoring hard data.
Is your business truly thriving? Is your product the right fit for your target market? Should you adjust your business model or not? The numbers will tell. Never avoid looking at the data for fear that it may not paint an optimistic picture. Instead, use the hard data to make strong, strategic choices.
6. Doing it all yourself.
It’s your business. It’s your dream. You are the creative, driving force behind it all. For this reason, it may be difficult to delegate responsibilities to others. However, failing to delegate can eventually lead to personal burnout and business failure. The only way to make your business work over a long period of time is to train others to help in key ways that lighten your load.