Mistakes to Avoid when starting a business
Starting a business can be a rewarding, interesting, and challenging time. There are plenty of things to consider, be it location, budget, product development, hiring and more. Before you even get started, there are dangers lurking in every direction that can derail your efforts. That's why we decided to share our list of the most common mistakes startups can make.
Not making a business plan
Starting a business without a plan is like setting out on a trip without knowing where you're headed. It's easy to get lost, confused, or discouraged when you're not sure where you're going or what you hope to achieve by taking this journey. A good business plan will help keep your focus on the end goal, keep you on track, and give you something concrete to show investors. The Government of Canada has lots of great resources for businesses.
Being disorganized
When you start a business, everything falls on your shoulders — from creating the product and marketing it to selling it and more. The last thing you want is for things to fall through because of disorganization and lack of planning. Use a data management system like LedgerDocs to help you with this. Be sure to create a detailed budget plan for what needs to happen when, how much time each task will take, and how much money will be needed for each aspect of the business. Also set up a good online calendar system so that you and your team can stay on top of what’s scheduled.
Not defining your market and target audience
It’s easy to get so caught up in the excitement of starting your own business that you forget about who your customers are and what they want as well as knowing who your competition is. You need to have concrete answers for these questions before you start spending money on advertising or promotional materials.
Trying to do everything yourself
It's tempting to try to do everything yourself when starting a business, especially when you're still learning how everything works. While you might be able to handle all the details at first, it's easy for things like accounting and bookkeeping to fall through the cracks if you're not careful. Start out with a bookkeeper as soon as you can, so that you have systems in place as your business grows.
Not being flexible enough with your vision
It's important to have a clear plan for how your company will succeed. While you don’t want to let short-term setbacks deter you from long-term goals, it's equally important not to get stuck on an unworkable idea after realizing there are flaws in your original vision or plan of action. This is where reviewing your plan and your financial numbers on a regular basis makes all the difference.
Undervaluing your product or service
It's important that you have confidence in what you're doing. If you don't believe in your products or services, then why would anyone else? Make sure that you are confident in your offering and that you know what sets it apart from other products on the market and this includes having a pricing strategy. This will help to boost your sales and help you gain more customers.
Not creating a marketing plan
Marketing is one of the most important aspects of any business, but for new businesses it can be hit-or-miss. Without a marketing plan in place, you won’t know where your customers are or what they want from your products or services. You can create a marketing plan by researching your market and competitors, deciding on the best ways to reach them, and then devising strategies to implement.
Being unprepared for tax season
If you're an independent contractor or sole proprietor who works for yourself instead of an employer, then you'll need to keep track of all your earnings and expenses throughout the year so that you can file your taxes at year's end. If you don't keep track of these things properly or do so inaccurately, then your taxes could be significantly higher than they need to be — or worse yet, there could be penalties involved if they're not done correctly!
Failing to plan for growth
Many small businesses fail because they don't plan for growth. It's important to think about how much money you'll need in the future, how many employees you'll need, and what kind of infrastructure (such as office space) you'll need, as your company grows.
Not implementing a proper bookkeeping process
One of the most important things to do when starting a new business is to implement a bookkeeping system right away. For this we recommend QuickBooks Online.This will help you keep track of all your income and expenses so that you can meet your tax obligations on time each year. It will also allow you to keep better track of how much money is coming into your account and how much money is going out each month, which can help prevent overspending or under-earning during slow periods in your business cycle.
These are all very common issues, and luckily most of them are easy to resolve with forethought and planning. Of course, if you're able to avoid these mistakes altogether, all the better. Ultimately, mistakes are going to happen. When they do, just make your corrections, and move on.
