Avoid These Common Business Mistakes When Starting Out
If you’re a first-time entrepreneur and business owner, it’s vital to get things right first time. To establish a successful business, you’ll want to avoid making these biggest business blunders…
- Don’t try to be all things to all people – More customers don’t necessarily mean a better business, and if you cast too wide a net you can end up having to carry excessive stock, employ too many people and spread your resources more thinly than you should. You may also lack the expertise to service a wide array of different products and market niches. Rather focus on a single niche sector of the market that you know you can look after in a superior manner. ‘Narrow your focus to broader your appeal’ is the advice given by experts. There may be a time to take on the wider marketplace, but wait until you’ve had the opportunity to build up the business and its resources.
- Don’t become too stretched to offer good customer service – Start-ups are often a one or two-person band, which is fine for keeping costs down, but don’t let it impact on the customer service you provide. In the early stages, one of the best ways to establish yourself is to offer better-than-average service but, on the flipside, below-par service will send your business quickly to the scrapheap. Make sure you have the necessary resources to look after your clients. A common business mistake is to use ‘newness’ as an excuse, but the reality is that customers don’t care about the origin of your problems.
- Don’t forget to watch the numbers – Entrepreneurs who base their business on a particular skill, like carpentry, photography, graphic design, art or writing, frequently become so wrapped up in being excellent in their craft that they forget to keep an eye on the books as well. While doing a good job is obviously a pre-requisite to success, it will all come to nought if you don’t send out invoices, chase up late-payers and keep expenses in check. Also be sure to review your rates from time to time. If you’re working 12-hour days and remain on the breadline, you’re undercharging and/or over-servicing.
- Don’t forget your business plan – Not only big corporates need a business plan; even a one-man band should have at least a one or two page strategy that sets out in broad terms what the business is all about, where it wants to go and how it plans to get there. When the going gets tough and you find yourself bogged down in the day-to-day details, haul out the business plan to give yourself some perspective and a reminder of where you should be headed. A word of caution though, one of the common business mistakes is to regard the business plan as untouchable and cast in stone. In reality, if market conditions change markedly, such as the onset of a recession, you need to amend your business plan accordingly.
- Don’t get tripped up by your ego – No matter how smart you are and how successful you’ve been at getting the business up and running, you can’t do everything yourself. Founders frequently fall into the trap of thinking that nobody understands the company like they do and no employee can hope to do all the jobs as well as they can. That fact is that, as the business grows, you’ll end up doing more tasks badly – until such time as you do untold damage to your personal reputation and that of your brand. Put your ego in a box and accept that perhaps others can do some things as well as, or better, than you do. Pick the key responsibilities you need to spend time on and then simply have oversight of the others.
- Don’t fail to market yourself properly – Build a better mousetrap and the world will beat a path to your door, said American philosopher and poet Ralph Waldo Emerson. Unfortunately, this is not always true. The world will only come seeking your mousetrap if a) it knows you make mousetraps, b) is convinced that your mousetrap is indeed better than others on the market, c) knows where to find the product, and d) the mousetrap is stocked at the promised outlets. A common business mistake is to set up shop and then wait, arms folded, for customers to come streaming in. Occasionally it does happen, but mostly it doesn’t. Set aside money for a sustained marketing campaign and view it as an investment in the future of the business, rather than as an unwanted expense.
- Don’t forget to pay the bills first – Business is looking good and you’re convinced you’re well on the way to success. After all those long, stressful days and sleepless nights you’re convinced it’s time to reward yourself with a new car, boat, jetski, diamond ring or that Harley-Davidson you’ve always wanted. Wrong! First, you pay the staff, then the bills, and then you put money aside for future expansion and a rainy day. Then, and only then, can you think about indulging yourself. You’ve made it this far by being frugal … don’t go and spoil it all now!