5 Mistakes to Avoid When Starting Your Business
When starting your business, there are a million tasks to complete and not enough hours in the day. Due to the stress and rush to do everything yourself under a limited budget, it can be tempting to cut corners, hire out for help before you’re ready, and even jump too far down the road in excitement. Ironically, most of the mistakes entrepreneurs make look very similar.
Here are five of the most common mistakes you should avoid to increase your chance of success:
- Skipping the Business Plan. Did you write a business plan before starting your business? Better question – was it a 5 page (or less) summary with some fancy charts that you got from the internet about how you’re opening in a billion-dollar industry? Hate to break it to you – but this is not a plan. Not planning correctly is either planning to fail or rolling the dice in Vegas. Neither are really how I want my year to go. If you’ve already opened – I get it – the days are too short and you never have the time. Pay for real assistance here and get a plan done that has specific strategies you can follow. Planning correctly increases your chance of surviving almost immediately – and since this is your livelihood, there is never a better time to get this done.
- Assuming High Revenues and Low Expenses. Most entrepreneurs believe they are going to sell a lot and avoid surprise expenses. Both of these situations are rare, and you likely are NOT the exception (sorry to burst your bubble). When you write out your financial projections (especially before you have any revenues to base them on), always assume your revenues will be less than you hope for, and similarly write in bigger budgets for your expenses. This will protect you from slower sales and surprise expenses as you begin to operate your business.
- Choosing a Sole Proprietorship. Most entrepreneurs start their business in a sole proprietorship legal structure (which is hardly a business structure at all). While this can work for a short period of time, it will often hurt the business from really growing. This structure doesn’t allow the use of tax strategies, prevents the company from building a brand, puts all of the liability on yourself (and your family), and rules out the use of business loans and investments to help you grow.
- Being Unorganized. If you’re anything like me, organization becomes it’s own hour-long (minimum) activity each day (including the weekends) if I even hope to be on top of things the following day. Skipped organization time two days in a row? Plan on reorganization taking up half of Day 3. Don’t even dream of missing it for a week or you may never see an empty inbox or a complete to-do list ever again. Though the time it takes to organize yourself each day may appear to be overkill when nightly relaxation is calling, this might be the single most important thing we can do as entrepreneurs and leaders to ensure we aren’t drowning in a sea of requests and demands for months to come.
- Being afraid to fail. Entrepreneurs are often afraid to fail. It makes them work harder at everything they do, which is why they also make great, forward-thinking employees. However, failure happens and it is sometimes out of anyone’s control. When it does, entrepreneurs often spiral in their mind. The reactions can be anywhere from shutting down completely, to micromanaging everything more viciously. Obviously both of these extremes should be avoided. Entrepreneurs need to keep a level head and remember that everyone fails. Focus on doing good work, learning from any mistakes, and pushing forward.
Need help getting starting your business? Let Catalyst guide you to success!