11 Major Pitfalls in Starting a Business: Mistakes in a Business Set-up is an opportunity to prepare your mind ahead of time as business involves risks. The road to startup doesn’t have to be rocky: Being aware of these all-too-common mistakes can help you prevent them.
Pitfalls of starting a business are risks involved in starting a business.
If you’re in the initial phases of starting your own business, then I must warn you: Avoid these mistakes as if your life depended on it. Because it does–your financial life, that is.
Let’s look at the pitfalls:
- Buying a job rather than a business:
Yes, you’ll have to be involved in the daily operations at the start, but remember that the major objective is to grow your business into much more than just a job where you work hands-on every day. Work on the business, not just in the business. Endeavor to get better in your business dealings.
- Being a great hairstylist but having no idea how to run a salon business:
You have to go into business with the basic and advanced knowledge of knowing all about the business. An entrepreneur in the shoes making business always says, “If you want to venture into a business, you need to research all about the business, starting from the A-Z of the business.”
Your previous jobs are all an apprenticeship to running your own business. Be an apprentice in all areas, not just in the trade or profession of your business. Most important, be sure you’ve paid attention to all aspects of business in your past jobs, no matter what they were, so you’ve done your basic, “how to run a business” apprenticeship.
- Taking on a Business Partner:
Most people give away equity upfront to a partner. Yes, there are examples of partnerships that work, but most don’t. Unless you’re absolutely sure about your partnership, hire people to help you out instead.
I always advise people to get a trustworthy and loyal business partner, who is reliable because “it takes two to tango”
- Starting a business from scratch rather than buying an existing operation:
Setting up a business may seem cheap and easy before you venture it, but it’ll cost you the most expensive asset you have—time and lots of investment to have a growing business because business comes with risks. Buy an undervalued company, and build it up, rather than start from scratch.
- Thinking the business idea will make the company:
It’s the people who make a business successful, not the product, not the service and not the new invention. Focus on building a great company as much as you do a great product.
- Thinking too small:
Many startup entrepreneurs want to generate a wage for themselves and nothing more. Instead, aim to build a profit, aim to build something large, and aim to build something great. If you shoot for the stars, you may fail, but at least you’ll make it to the moon. You’ll grow no matter how many times you failed in your business. The business input and business processes will determine the business output.
- Competing on price and price alone:
This is by far the fastest way to send you into bankruptcy. Business is about profit, and having smaller revenue with a larger profit margin will always beat out winning tons of business but earning almost no profit. Learn marketing and sales so you can get out of the price wars.
- Trying to cost-cut your way to success:
By saving a wage and doing the work yourself, you forget that nobody’s out there drumming up new business for you. Focus on bringing in the business, not saving a few pennies.
- Hiring cheap employees:
You get what you pay for. Getting the right people is crucial, so don’t just hire anyone all in the name of their services are quite affordable. Wait until you find the right someone. Search for the best and the best will come to you; so don’t relent in paying for the best.
- Focusing on only one area of your business:
Business success involves three main areas: sales and marketing, finance and administration, and operations. You have to keep all three working and growing in unison, not just the area you’re good at.
- Not testing or measuring anything:
Knowing your numbers is vital. In fact, you can’t manage what you don’t measure. Measure everything from day one, from how many new prospects you have to how many sales you make.
- Doing the work once and getting paid once:
The key to success is to do the work once and establish a long-term, income-generating relationship. Learn to structure your clients, your business and your income that way, and you’ll build a great business.
Clients/customers are very essential in every business as they are the market targets,whether you sell products or render services. Your business will develop when you set your mind to customer satisfaction through a number of factors such as: Quality service delivery.
A good business will always deliver what it promises, but a great business will deliver more than promised. Ensuring your business provides quality service delivery will make one thing certain, customer loyalty and this will undoubtedly take you a long way in the business market. If a business lacks customer loyalty as a result of no customer satisfaction, then its competitors will steal its customers thereby gaining competitive edge.