If you want to start a business this year, take a look at the following list of business mistakes that many start-ups make and try your best to avoid them.
When taking the brave step of starting up your own business, generally you accept that some mistakes will be made along the way – that’s how entrepreneurs learn right? Starting a business that succeeds and continues to flourish isn’t always so easy. Yet often start-ups tend to make the same mistakes again and again, and with a decrease in the business population in the UK since 2000 according to the Department for Business, Energy & Industrial Strategy, it’s wise to learn to identify how to avoid possible pitfalls. In this article, Intasure reveals 10 common mistakes that new businesses may make and offer suggestions on how you could avoid them.
1. Not having a plan
While it’s OK for your plan to grow and evolve with your business, it’s not OK to skip the plan entirely. A written plan helps you to focus on your customers, goals and business objectives. It also gives you something to show to investors or partners. Ask yourself: what are your priorities? How are you going to generate new business? How are you going to measure success? Do you need business partners? This will help you to better understand the foundations of your business.
2. Not knowing how to develop your plan
A business plan is crucial to develop your own company, because it’s the document that describes your business and helps you to clarify your business idea. Investors and potential partners can see that you know everything about the market and your industry.
3. Having the wrong team
Small businesses can often hire staff too quickly, instead of taking the time to find the right people to build their team. Your employees are your most important asset, so you need to carefully hire people who are aligned with your company’s core ideals and values. Once hired, you should ensure you have systems in place to help their success. Define expectations, roles and responsibilities for every employee and remember that attitude and fit are important as many skills can be picked up along the way.
4. Don’t ignore data
Data isn’t just for giant companies – it can help you make important decisions for your business. Plus with GDPR imposing fines for companies that fail to secure their data, it’s important that you have the correct procedures and firewalls in place.
5. Misunderstanding the importance of the correct customer
Without customers, you have no business; however there is such a thing as the wrong customer. Conduct market research and listen carefully to customer complaints as those who take the time to feedback are giving you a chance to change. It can be tempting when business is slow to court any customer, certain businesses may seek to run credit checks on new customers and be clear about pricing and terms and conditions before working with them. A defaulting customer is not worth the stress for your business.
6. Assuming your product is perfect
A successful business should always be getting better. Don’t get wrapped up in the day-to-day running of the business and forget to build on it. Listening to feedback and learning the needs of your market are just two ways to help get better.
7. Having the wrong price
Starting off with a low price to undercut the competition can be tempting but in the long run it could result in prices too low to profit. You should be aware of various extra costs like production, supplier prices and employee salaries. If you fall into the trap of decreasing returns then eventually your business can fail, instead you should figure out how you can differentiate your products and services quality to justify prices.
8. Not finding the right investors
Finding someone to back your business is important, but focusing solely on funding can be a huge mistake. Investors and partners should be seen as an extension of your team so they need to hold the same values as you do. Be sure to vet your investors and make sure they are right for you.
9. Not celebrating victories
Running a business is tough, so you should take the time to reward yourself and your staff as you reach certain milestones – whether that’s a number of sales or a number of months running. Take the time to reconnect with why you started the business in the first place, as it can be hard to keep this in mind when things get tough.
10. Not being insured
Things can, and often will go wrong, which is why Intasure offers commercial insurance for small businesses, including public liability and professional indemnity covers as well as tailored insurance packages for cafes, offices, surgeries, shops and other small businesses.
If you’re interested in finding out more about our small business insurance or business and commercial insurance or to get a quote, then please call Intasure on 0345 111 0680 and we’ll be happy to help. What would you add to the list? Let us know via our Twitter.
*The opinions and views expressed in the above articles are those of the author only and are for guidance purposes only. The authors disclaim any liability for reliance upon those opinions and would encourage readers to rely upon more than one source before making a decision based on the information.