18 Jun 8 Common Mistakes People Make When Starting a Business
Starting a business is no easy feat. Although the prospect of becoming a successful entrepreneur is exciting, it is easy to get ahead of yourself and reality. It happens to plenty of businesses, which may be why 20% of businesses fail within the first two years, according to the U.S. Bureau of Labor Statistics. Be sure to launch your business on the right foot by acknowledging and addressing these 8 common mistakes from the get-go.
1. Don’t Understand their Customer’s Problems
Many businesses wrongly think that customers are buying their products and services when customers are actually buying a solution to a problem. Think about your offerings through the lens of the problem it solves. Then craft your story to speak to this specific problem and how it affects your specific audience. Learn how to create an effective business story, by asking yourself the 3 most important business questions.
2. Don’t Have a Way to Profit Built In
Your business model & expenses should be built around profitability. It’s all fine and dandy that you are providing a service or solution that you wholeheartedly believe in, but if you are not profiting from it then how will you afford to maintain your business in the long run? Too often, new entrepreneurs get hyper-focused on details, service offerings and logistics without taking the time to define an overall business model that is profitable. Note: Profitability can take a few years for a new business to reach – the key is to structure your business and choose a model where this is possible.
3. Get too Many Opinions From People that Don’t Have a Business
In the excitement of starting a new business, you will be offered all kinds of unsolicited advice and opinions. Often times it may be from friends and family, many of whom do not and never have owned a business. While this comes from a good place, do your best not to take their words to heart. All of this info can quickly cloud your thoughts, warp your mindset and lead you down the wrong path. Instead, connect with other business owners or a business coach that can give you relevant advice from personal experience. (Psst – we have a stellar business coach on our team that works with new business. Apply HERE for a free coaching session with Krista.)
4. Don’t Set Aside Money to Pay Taxes
Starting a business, or becoming self-employed, means that you will face a whole new world of taxes. One of the biggest mistakes you can make in regards to taxes is not setting aside money – and then getting hit with the bill. The moment you register your business you should create a business bank account. Every penny you make as & spend on the business needs to go through this account for safekeeping, tracking and management. It is also where you can save money for your quarterly and annual tax payment. Doing this will help you hold yourself accountable throughout the year.
5. Choose a Forgettable Name
When creating or choosing a name for your business, do so carefully and thoughtfully. You need to stand out in an overcrowded sea of businesses with similar (if not the same) services or products as well as create a moniker that is memorable, reflects your mission and core values and ideally, is short & easy to spell. You should also be careful not to select a business name where the URL & social media handles are not available. It’s a lot to think about! But not doing this work creates inconsistencies across the board that make your business more difficult to find and create challenges in building your brand.
6. No Marketing Plan
When it comes to a marketing plan, start by defining a goal and offering. What will work right now? How can you best serve? What can you realistically manage? This will shift regularly to solve current consumer problems. Once you have defined a direction, you need to stick to it. Too many messages or offerings or calls to actions will confuse your audience (and kill your sales). No matter which channels or marketing platforms you use it is essential that this marketing message remains consistent. Once your message is out there, get feedback and adjust to see what content is resonating with people and where they are most engaged – do more of that. (Marketing, like accounting, can feel daunting – if you want to shortcut things with expert help, give us a shout.)
7. Don’t Tackle Mindset Hurdles
An ongoing battle that anyone who is starting a business will face is their personal mindset. Your limiting beliefs and personal narratives about money, your self-worth, your adaptability, even what defines success are all common mindset hurdles. The sooner you pinpoint and tackle your mental barriers, the sooner they will stop limiting your growth & success and get out of your own way. As the famous saying goes, whether you think you can or think you can’t, you’re right.
8. Go it Alone
As a business owner, you NEED a like-minded support system and relationships to get you through the ups and downs. Someone to hold you accountable, lend an outside perspective & help increase your self-awareness. A business coach or mastermind group of other business owners are also great resources to tackle mindset hurdles. The challenges you are struggling with are not unique to you and others can help you see these blind spots more easily.
Shortcut the launch of your new business with help from a team of experts. Sign up for our guide to Launching Your New Small Business or get in touch at firstname.lastname@example.org.