When starting a business, be prepared to make a few mistakes. Every budding entrepreneur has the occasional blunder – these can often lead to valuable lessons that can help to improve your business. That said, there are certain mistakes that can be more costly and harder to recover from – these are the ones that you probably want to avoid. Here are just seven startup slip-ups that you don’t want to fall trap to.
Having no budget
Having a budget can prevent you from spending too much too early. Startup costs can quickly add up, so make sure that you’ve got a financial plan in place and a clear spending limit that you can’t exceed. When borrowing money, make sure that you’ve got a borrowing limit. A business line of credit from a lender such as Fund Wise Capital could be a good option to put a cap on your borrowing – just be aware that these types of loans can be difficult to obtain. It could be worth talking to a financial advisor when starting up a business if you’re not sure of the kind of budget that you need.
Investing in business premises too early
Unless you’re starting a shop or a restaurants, you may not need to invest in physical premises at first. A lot of new business owners can waste money on an office when working from home could be a better option. This could save you huge costs on rent and bills. It’s even possible to hire employees while working from home by hiring remotely – several startups have embraced this, functioning without the need for an office. Eventually you may outgrow your home business, in which case you can look into office space.
Failing to do market research
Market research is essential to any business. You need to know who your competition are, how many clients there are in need of your business and where to find them. You can also do surveys and hold focus groups to find out what your clients want so that you can fine tune your business to their needs – every business idea has flaws and sometimes it takes asking other people to realize what these flaws are.
Not building a website
No startup can survive in 2018 without a website. When looking for a company to use, almost all consumers do their research online. Whilst you can use other forms of marketing, many people trust a business more when it has a website as it makes you seem more established. You can build a website yourself using a free website builder such as WordPress or you can hire an web developer to produce a site for you.
Not registering your business
Registering your business will ensure that it is a separate entity from yourself. This can be complicated depending on the business structure you choose – I used Your Company Formations which does most of the work for you. It’s vital that you also register with customs and revenues in order to pay your taxes, plus there may be licenses that you need in certain trades such as a food license or music license.
Handling all aspects of your business could save costs, but it can also be difficult. Almost all business owners seek out help when it comes to complex admin such as accounting and legal paperwork. You may also want to hire a marketing company to help gain you exposure. On top of this, you may want to hire people to help with cleaning and maintenance. You’ll spend a little extra by doing this, but you can be certain that these aspects of your business are handled proficiently.
Skimping on security
Many new businesses find themselves as a target for burglars and cybercriminals. This is because thieves know that new businesses generally have weaker security. Don’t make yourself an easy target by skimping on security – invest in digital security software to keep your files secure and put any physical items of value in a safe. It could even be worth installing a burglar alarm to further deter thieves. On top of investing in security measures, make sure to follow certain security protocol. Keep your passwords complex and have different ones for different services. Also stay alert when it comes to suspicious calls and emails – never give your bank details or password details to a stranger.
*This article was contributed.