7 Startup Mistakes That Will Doom Your Small Business
You have an interesting business concept and a desire to make it a reality. All you think about is your passion to start your own business. Getting excited about starting a business is easy.
As an entrepreneur, I can tell you from experience that it’s not easy to actually start a business. A lot of businesses fail. Only about half of small businesses last five years. You need more than an interesting idea to create a successful business. Many owners aren’t prepared and make a bunch of mistakes along the way.
I want your business to succeed. I want you to experience the same joys of expansion, hiring employees, and increasing sales.
To help you, I’m going to alert you to common small business mistakes. I’ve made mistakes, and I’ve seen other entrepreneurs makes mistakes. Learn from us and put your business on the path for success.
Here are the seven business mistakes you need to watch out for.
1. Not researching your idea
Not taking time to research your idea is one of the worst business mistakes. You probably think you have the best idea ever, but it might actually be terrible. Your idea isn’t great if there aren’t people willing to pay you for it.
Before you launch a business, you need to do research first. Find out if there’s a market for you. Ask potential customers if they would buy what you have to offer.
Before I started the company that would later become Top Echelon, I did a lot of research. I went through the phone book to find potential customers. I talked to potential customers about their needs and wants. I did research at the library (because there was not internet back then). I found out what it would take to start my own business, and I used my research to shape my business into a model that succeeded.
2. Being unrealistic
After you research your market, you need to come up with a realistic plan and expectations for your business.
I can understand being excited and ambitious about your business. But whatever you do, avoid a dominate-the-world mentality. That kind of thinking will cause you to make bad choices and result in inflated projections and disappointment. Remember, you can’t be all things to all people!
Be realistic. There’s no way you will convince everyone to be your customer. There will always be doubters and competition pulling customers away. When you set goals and make sales projections, think about what is reasonably possible for your business to do.
3. Underestimating expenses
Starting a business comes with a lot of expenses. Many new small business owners spend more money than the business brings in. Running out of money could result in a closed business.
Not understanding how much things cost is a common business mistake. You need to calculate the full cost of your products or services. Factor in the cost of waste materials, overhead expenses, and your time.
Some business owners make overzealous sales projections and spend money according to those projections. Because the projections are too generous, the business spends more than it actually brings in, causing a negative cash flow. This goes back to my second tip: be realistic.
4. Not asking for help
You do not know everything that you need to know to start and run a business. Sure, you can learn things, but that takes time.