If you are an entrepreneur or thinking of becoming an entrepreneur, here is a great checklist of 10 common mistakes that you’ll want to avoid before you decide to start your own business.
- Thinking You Can Do It On Your Own — It’s very difficult to build a scalable business with just one person. Although some businesses such as website design, public relations, and other service-based businesses can survive individually, most businesses will need to ensure that they’re profitable enough to acquire hired help. To ensure that your business will be profitable, be sure to determine that your business has sufficient profit margins to bring in hired help.
- Asking For Too Many Opinions — Everyone has an opinion when it comes to a business and it’s easy to become confused or misled by so many differing opinions. To resolve that issue, build an “advisory board,” two or three people who you admire and trust that can help you build and establish your business.
- TargetingÂ a Market That’s Too Small — It’s definitely a great idea to focus on a niche mark to sell your product or service to. However, if your niche market is too small, it will become difficult for your company to continue to grow.
- Spending Too Much Time On Product Development — You can have the greatest product in the world, but if you’re not making sales, the company is not going to last. Make sure you’re devoting enough time to your sales efforts before focusing on product development.
- Not Raising Enough Capital — Before you open up your doors for business, you need to know your costs inside and out. Calculate all of your expenses: rent, utilities, inventory, salaries, insurance, equipment, and overhead.
- Raising Too Much Capital — Too much capital leads to wasteful spending. Sometimes some old-fashioned boot-strapping is what works best for companies since it forces them to scrutinize every single cost that’s involved in starting a business and prevents them from over-hiring.
- Not Having a Business Plan — If a company requires a lot of capital to start, a business plan is essential. Although businesses that don’t require much capital can get away with not having a business plan, creating one is always recommended. Following a financial analysis of the business, the second-most important aspect of the business plan is a competitor analysis. You don’t want to be in a position where you ignore a competitor only to find out months after you opened your business that they have a significant advantage over your business.
- Overpaying for Customers — Any start-up business must watch their marketing expenses very closely. Customer acquisition is important, but you need to monitor customer behavior to ensure that they’re repeat customers and that your marketing dollars are being spent wisely.
- Not Building a Referral Network — Building a referral network is a great way to attract new customers without having to spend money. Think of complimenting business who are related to your business but not directly competing with you and form a business referral relationship with them. It’s a cost-free mutually beneficial arrangement that is easy to form and will greatly benefit your business.
- Not Taking the Plunge — Many times, people are just too hesitant to give up on their dream of starting their own business due to the uncertainty of having to leave a steady paycheck. Starting a business involves risk but if you’ve done your dueÂ diligence, you have to be confident that you will be able to succeed in your new venture.
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