New Business Blues: 5 Common Blunders to Avoid When Starting a New Business
Whether you’re working from your kitchen table or using serviced offices with meeting rooms to kickstart your new venture, starting a new business is exciting. However, the initial excitement that comes with having a great idea can dampen a bit when you realize all the challenges ahead.
To navigate that rocky road with success, it's important to be aware of the common blunders many new entrepreneurs tend to make. Below are our top five mistakes to understand and avoid:
1. Forgetting to write a business plan
Get it in writing! That bit of evergreen wisdom applies to legal contracts as much as new business ventures. Forgetting to write a business plan leaves you without a clear direction forward. It also robs you of the preparation needed to overcome the hurdles that inevitably lie ahead.
Although your business plan doesn’t have to be a 100-page manuscript, it does need to touch on the following: general goals, strategies for reaching those goals, financial projections, and potential challenges.
2. Overlooking market research
Businesses need markets to thrive, and not all markets are made equal. Some are far more lucrative than others. Some are also far more saturated than others. The best way to find out if your business idea has a thriving market to support it is to do market research.
Start by thoroughly understanding your potential customers. What are their needs, preferences, and pain points? Use interviews, surveys, and data analytics to determine if the demand from customers is promising enough to make a healthy profit. Otherwise, you might be wasting a lot of time, money, and resources.
3. Underestimating costs
Most, if not all, new businesses need startup capital to get their operation up and running. Once up and running, they need a bit more capital to ensure everything runs smoothly during the growth phase. The related costs might include maintenance fees, marketing, new hires, and more.
With so many uncertainties, it’s difficult to pinpoint exactly how much you need in advance. All too often, this leads new entrepreneurs to underestimate how much things cost, which can quickly lead their new venture to fail. To avoid that, research common business startup costs, and then prepare for them.
4. Neglecting marketing
Even if your business develops a great product or service that people want, it won’t be successful if the right people haven’t heard of it. That’s where marketing comes in.
Marketing identifies and advertises to whoever needs to hear about your product the most. Whether you do marketing and promotion in-house or outsource it to creative professionals, invest the necessary time and resources into reaching your target audience. Leverage the power of social media alongside more traditional channels.
5. Ignoring laws and regulations
Although legal language can be dense and difficult to understand, it’s essential to find out what it says to ensure you’re following all the relevant rules and regulations. Failing to do so can lead to hefty fines or, in the worst case, closure of your new business.
To mitigate those risks, read up on all the permits, licenses, and tax obligations required for businesses in your industry and area. If that’s a bit overwhelming, don’t be afraid to contact a legal professional to help you comply with everything.
Starting a new business is exciting, even if it’s far from smooth sailing. Although challenges are inevitable, it helps to identify common blunders such as forgetting to write a business plan, overlooking market research, underestimating costs, neglecting marketing, and ignoring laws and regulations. Once identified, you can avoid (or at least mitigate) their negative effects, and boost your chances of success.
