Starting a new business is a lot like becoming a new parent – hard work, lack of sleep, lack of money, lack of time for going out and, hopefully, a feeling that in spite of all the challenges it’s all been worth it. It’s also like becoming a new parent in the sense that no matter how many books you read and classes you attend, nothing will quite prepare you for bringing your business to life. You’re probably going to make a lot of mistakes, but here are 10 you can easily avoid.
- Assuming there’s a market for your idea
Don’t assume, ask and ask people you know will be objective and honest with you. If there is genuinely nothing like your idea in the market, then find out why not. If there is competition out there then what do you bring that’s different? How much are people really likely to be willing to pay for your product or service?
- Ignoring business organisation
Whether you like it or not you will need to have some sort of structure to your business to ensure that everything which needs to be done actually gets done. It is also a prerequisite for ensuring compliance to any relevant legal regulations such as the data protection act.
- Jumping into business with friends
Business and friendships can mix very well, but only if the people involved share a similar vision and realistic expectations. It’s also important to be pragmatic about what workload you can take on, particularly if you have other responsibilities and to be clear about how finances will be managed. As a final point, it’s strongly recommended to have a plan in place in case one of you is forced to back out of the business for any reason.
- Overestimating early sales
There is a place for optimism, but in finance it’s best to err on the side of caution. Businesses generally take time to gain traction and it can easily be a year or more before they make any real money.
- Assuming you will get finance/outside investment
A quick (re)watch of Dragons’ Den should be enough to show how often entrepreneurs are rejected by potential investors and similar comments apply to bank financing. Your chances of getting investment increase in line with your professionalism and the quality of your idea, but it can still take time to get recognition from venture capitalists and financial institutions.
- Failing to budget for outside help
There are several aspects to running a business and even if you are good at all of them, will you really have the time to do all of them? Even if all you do is outsource certain particularly-challenging tasks to freelancers on an ad hoc basis, you still need to assume you’re going to need to pay for help at some point.
- Being bamboozled by consultants
Some consultants are worth their fees, others less so. Some are better sales people than mentors. Really good consultants will be happy to share their track-record with your openly and give you time to make up your mind about whether or not you need their services right now. Be very suspicious about ones who push hard to get you to sign up there and then.
- Forgetting to network
Network at every opportunity and if you don’t have the time, energy or money for it then you need to reassess your business and see what steps you need to take to make it happen.
- Thinking online marketing is everything
Even if your business is run purely online, be prepared to look at offline options for driving traffic to it. There is plenty of life left in real-world promotional tactics such as old-school leafleting or delivering talks (which you can then potentially repurpose as web content).
- Analysis paralysis
Yes you have to plan but you can’t spend your whole life planning. As some point you just have to take a deep breath and jump.
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