Starting a business is challenging, because if it was easy then everybody would do it, right? And there is no denying that those first few years are the most challenging of all, not to mention the most important. Why? Because they are responsible for setting the tone of the business. So it makes complete sense to start off on the right foot during those first few years because they determine the business’ future success and growth. When you start a business you are bound to make some common mistakes, it’s inevitable, especially if you are not a seasoned entrepreneur. So to help get you started, here are a few common mistakes that people make when starting a business and how to avoid them.
1. Not setting boundaries and the right expectations
From the moment you encounter your first client, it’s imperative that you set appropriate boundaries and the right expectations. Your first two rules in business should be, don’t overpromise and don’t be afraid to lose the client. It really is better for your business to be honest with a client who has unrealistic expectations and risk losing them as opposed to agreeing to their expectations and risk upsetting them later on down the road. That brings us to the third rule which should be, be honest with yourself and with your clients.
2. Getting into debt
As far as possible, don’t get into personal debt to fund your business venture. It’s best to stay out of debt if you can. Granted, a business does need to spend some money in order to get started. Even if you are a one-person startup the absolute minimum you will need is money for website hosting, business-name registration and equipment such as a workspace and a computer in order to run your business. But remaining debt-free as much as possible is advised and a huge win for your business when starting out.
3. Not setting a budget
Having a budget is hugely helpful for navigating the many financial ups and downs of a new, and existing, business. Knowing how much money to put towards what will put you in control of your finances and give you a sense of confidence. Working out the business’ different expenses and profits can give you a rough calculation of where your business is heading. Understanding where your money goes every month is how you run a business the smart way.
4. Not putting in enough hours
Owning and running an online business is often seen by many as easy and convenient because all you really need is a laptop and an internet connection to run your business from anywhere in the world. But in reality, that is not the case. A common mistake that inexperienced entrepreneurs often make is not putting in the effort that is needed to grow the business aggressively in the beginning and they end up not working hard enough in those first few years. Building a strong foundation in the beginning is essential if you want your business to survive. So if you feel like you already work hard on your business, then work harder! The sacrifice that you make now will pay off in the future.
5. Trying to do too much
Whether you can do the job or not, get someone to help you. Outsourcing is a great, cost-effective way to scale your business without compromising on the quality of your services. Rather spend your time and energy focusing on growing and managing your new business. Delegating tasks allows you to get more done in less time and grow faster.
6. Choosing long-term contracts with service providers
When you start a business, your recurring income is often low and your client turnover is often high. So it makes sense to pay month to month rather than commit to a long term contract with your service providers. Paying month to month gives you the option to cut costs where needed if you happen to experience a low-income month, which is much better than being stuck with high fixed payments that could cause you to get into debt. Having a budget will also help you to manage service provider payments more easily.
7. Not having a dream that keeps you motivated
Starting a business is difficult and wanting the income that comes from building your business is not enough to keep you motivated during tough times! You need a dream to hold on to, something that will keep you from being disillusioned and keep you going and focused on growing your business. Having a dream can keep you going even during the darkest, most hopeless of times. It could be providing a great life for your family, making a difference in other’s lives or simply getting out of personal debt. Dig deep to find your dream and once you have that, focus on it and it will carry you through.
8. Overcharging
It can be tempting to overcharge, especially if you feel that your work is invaluable, but choose to stick to a fair price. Your price should be competitive, at least to start off with, and then later on when your clients on retainer begin to see the value of your work, you can think about increasing your prices yearly. Your success relies heavily on retention, so keep your clients happy and don’t overprice your services. Gain your client’s trust over time and let them see the value that your service has to offer.
