Did you know that 20% of small businesses fail in their first year? While a lot of things can lead to a business going under, and fast, there are a few common hurdles you need to look out for when starting a company.
In this article, we’ll break down 5 common mistakes new business owners make. We’ll tell you how to avoid them, as well as a few things you can do to build the right foundation for your company.
Now then, let’s get started!
1. Don’t Forget to Get Licensed and Insured
If there’s one thing that can shut a business down fast, it’s significant fines and penalties for not operating legally. That’s why, before you open your doors, you need to make sure that your business is both licensed and insured.
A pro tip? Consider investing in a sole proprietorship for your business. Doing so can help protect you and your business, which, of course, is a good thing.
With business insurance, there are a few options, but what you should have covered? Professional liability, data breach, workers comp. Are a good starting point, but there are many more types of insurance policies, and you as the owner should also have a business owner’s policy which covers general liability, property and loss of income.
2. Consider the Worst Possible Outcomes
When you craft a business plan, regardless of the type of business you want to open, you’re looking at what you need to do to be successful. Often times, you completely ignore what could possibly go wrong.
While it’s tough to do so, you need to sit down and figure out what issues could arise in your first few years. Doing so will allow you to prepare better and even tweak and improve your long-term business plan. The methodology to use that will present the threats, weaknesses but also opportunities and your strengths – is called a SWOT.
3. Don’t Try to Do Everything Yourself
We get it. Resources are limited, and you need to do almost everything yourself, especially early on. While that’s understandable, it’s never a good idea to try to do everything yourself if possible.
Something as simple as outsourcing your company’s website or payroll is a great way to take a few tasks off of your plate. That way, you can focus on other areas of your business that may need more attention.
4. Avoid Trying to Grow Too Fast
Every new business owner has big dreams. Because, let’s be honest, where your business is at now isn’t your longterm goal and you aspire to own a more prominent and more successful company.
With that in mind, trying to grow too fast can sink a new company rather soon. So, while it may be tough, try to slow down and don’t rush progress, especially early on.
5. Don’t Be Afraid to Change Directions
As your business starts to grow, you’ll realize that your original business plan might not be the best course of action anymore. And while it may be tough to do so, you have to know when to change direction and adjust or tweak your business strategy.
The tough part? Changing your course of direction too much, or too quickly, can do more harm than good. It’s up to you and your team to decide if your gut is right and a change of plans is in order or not.
5 Mistakes to Avoid When Starting a Company
Well, there you have it! Those are 5 mistakes you, as a business owner, need to avoid when starting a company.
Remember, operating legally and planning your every move is key to a business’s early success. As long as you do those two things, and surround yourself with the right people, you should find the results you’re looking for.
Looking for more tips and tricks how about lessons learned for self-made Entrepreneurs.