It’s no walk in the park to start a business.
After all, people start businesses all the time. But not all are successful. The barrage of details and setbacks and planning can be too much for many would-be business owners. Fortunately, failures often double as lessons.
Here, we dive into seven mistakes that new businesses often make. By knowing what to avoid, you can increase your likelihood of a successful start to your new business.
1. Neglect To Make A Marketing Plan
Sometimes, new business owners depend on word of mouth as their sole marketing technique.
Unfortunately, it’s unrealistic to think that word of mouth is all you need. Modern marketing techniques—including a mobile-friendly web page, strong social media presence, sponsored ads, and even mass text messages—can make or break the creation of your customer base.
The first mistake to avoid is thinking that you’re the exception to this rule. Start out strong with a specific marketing plan directed at your targeted audience.
2. Overspend Or Underspend
New business owners are often most concerned about finances. This concern is what fuels such huge mistakes in how much or how little money business owners spend when they first start out.
Often, business owners will underspend when starting out because they’re concerned that they won’t make the money back. Other times, they’ll overspend in the hopes that this spending will let them make the money back more quickly.
The key is finding a balance between the two—spending enough that you’re providing customers with a good experience, but cutting corners where possible and doing things efficiently.
3. Underprice Or Overprice Your Services or Products
Another common financial mishap for new business owners is not knowing the right price for the product or service they’re providing. This leads to these owners charging too little or too much.
The key to properly pricing your product or service is to take several factors into account. Keep in mind what other similar products cost, the quality of your work, the training or schooling required to complete your work, general production costs, and even the time you put into providing the service.
4. Avoid Written Agreements
When first starting a business, it’s easy to fall into the trap of keeping relationships with customers and business partners casual or informal. Part of this means avoiding written agreements and opting instead to make agreements by word of mouth and pure trust.
However, it’s important to keep in mind that professionalism matters even in the earliest days. From the get-go, this professionalism should be manifested in the use of receipts, invoices, and other written contracts.
5. Fail To Protect Intellectual Property
Another way that new business owners set themselves up for future problems is by neglecting to follow the legal processes that register their intellectual property as their own.
There’s a lot of creation in the process of starting a business. Logos, names, and resources are all common parts of new businesses. Some people may be providing creative services such as design or photography. Regardless of what you’re creating, you need to know what rights you have and what rights others have in regards to your creations. Knowing your eligibility for copyrights or trademarks is a big step.
6. Hire Too Many Or Too Few Staff
Just as many new business owners have a hard time deciding how much money to spend, many also have a hard time deciding how many staff members to hire. Of course, in many cases these two decisions are closely intertwined.
Once again, the key is balance. You don’t want to overhire and pay staff members just to stand around. You can always hire more later as you grow. You also don’t want to hire so few staff members that you run yourself into the ground and burn out too quickly. You want just enough staff that things get done.
7. Think In the Short-Term
Some new business owners get so excited about starting a business that that’s all they think about: starting. In every decision, though, it’s important to look to the future.
Usually, this means starting out with a developed business plan. This way, you can determine the likelihood of different factors and set goals. All decisions made should reflect a mindset that keeps these goals in mind.
Brooklin Nash is a professional content marketer creating content for Invoice Simple: an invoicing app and generator focused on making getting paid simple for small businesses.