Starting a business is very exciting. You’ve been working on your idea and are now taking steps to put it to fruition. Business plan, check! Starting capital, check! Location, scouted! You’re now getting ready to launch your website or open your physical store.
Going into business has many positives, but the whole journey of entrepreneurship does come with its own challenges. Your job as a business owner is to ensure that your business is running as smoothly as possible, anticipating issues and avoiding problems as much as you can. While there’s no way to be problem-free absolutely, here are a few mistakes many new business owners make. Knowing is the first part.
Being hasty
Opening a business is a big step. Along the way, you make both well-considered and impulsive decisions that could go either way. The mantra “Just do it!” still holds its water, especially because many people get caught up with over-thinking and over-planning, and end up not doing anything at all. However, you want to be balanced. One big issue is acting in haste!
For example, you’re excited to open up your physical store as soon as possible, so you end up taking short-cuts that may seem trivial but can prove to be disastrous in hindsight. If you’re opening a brick-and-mortar store and have been toiling away, make sure that the construction runs smoothly and gets finished at your set deadline. Set aside time to hire commercial cleaners to make that final cleanup before you actually open the store.
If you’re launching a new website, take time to do final proofreading and information checks before going live. These may seem like small steps, but they massively impact the first impression you’ll make to your future customers!
Not checking legalities
There are certain legal steps you have to take when you’re starting a business. You wouldn’t want to be running an under-the-table operation that will only bring you constant anxiety and uncertainty. Starting off on the right foot is crucial for your peace of mind and your customers’. Being a legitimate business with the correct registration and approvals only adds credibility to your brand. Check in with legal professionals to make sure you’re not skipping any important steps. Even if you don’t intend to skip over any of the legalities, having a professional help you will ensure you’re not making any innocent mistakes that can cost you big in the longer run.
No cash cushion
Another big mistake that business owners make is that they spend all their capital in the beginning. They depend on the eventual profits and constant cash flow to sustain fixed costs like rent and other expenses. While many people have started businesses this way, most business owners who tread this financial tightrope end up being forced to make unfavorable decisions like having to take on debt in the beginning or prematurely close down.
Not having the cash cushion to sustain operations for a couple of months is a big mistake. You can’t absolutely predict how much you’re going to make profit-wise in the beginning. Also, there are a lot of surprise expenses that could pop up, especially in the beginning. Experts suggest keeping between three and six months of operating expenses in cash. This will allow you to stress less in case you have to make adjustments to increase sales or haven’t made enough to cover payroll and rent in the beginning. It will protect you from falling into a deeper financial hole and making unwise decisions.
Too many freebies
When you start a business, you tell everyone about it–family, friends, old classmates, neighbors, everyone! Now, while ideally these people come around and become your first customers, many new business owners fall into the trap of giving away too many free products or services, especially to people they know. Giving away freebies is definitely a legitimate way of getting new customers. However, you wouldn’t want this to be the norm.
Sadly, people like freebies and tend to default to asking for things for free if they can help it, whether unwittingly or not. So it’s in your best interest to make sure that you communicate that any freebies you give are for your launching and not an ongoing thing that they can depend upon. Just figure out how to say that politely!
These are just some missteps that you can hopefully avoid making as you embark on your new chapter as an entrepreneur.