Starting up a business takes a lot of hard work and is daunting to many people. It is often difficult to tell whether or not the business will fail or thrive until after the startup period. You can, however learn from the mistakes that other people have made when starting up a small business. Here are 5 common blunders to avoid when starting up a new business.
1. Failure to manage your cash
When starting up a business you need to remember that it will take a while before your revenue outstrips your costs. Getting paid on time and managing your outgoings is critical to business success. Creating a cash flow plan will help you map out the amount of sales you should be expecting and when expenses are due.
2. Not investing in marketing
Potential customers will not know who you are, what you do, or where to find you without effective marketing. Many small businesses are reluctant to spend money on marketing, but you have to look at it as an investment rather than an unnecessary expense. You also need to spend some time and money on developing a marketing and business strategy, to ensure that you are aware of what needs to be done to effectively market your business.
3. Skimping on professional advice
You should definitely speak to a professional when it comes to business tax, legal and financial advice. They can be the most expensive mistakes to fix, and can also have a negative effect on your business if you are seen as being unlawful or unethical
4. Failing to get feedback
Feedback is so important in the startup phase of your business. Some people may not want to receive feedback because they think someone will steal their idea, they think that they don’t need feedback because their idea is good enough already, or simply because they are afraid of what feedback they might receive. Every company needs feedback throughout the life of the company, but especially in the startup phase as this can help avoid potential problems, and can ensure that you are addressing a genuine need in a compelling way.
5. Thinking you’ll be an overnight success
It will take longer than you think to become profitable, and managing your business will take up most of your time not only in the first few months but also in the first few years. You have to be prepared to put in the hard work, work long hours, and not settle when the business is ‘good enough’ but strive for your business to be the best in the market.
If you are considering opening up your own business or want financial or legal advice on your business, our accountants and lawyers can assist you. Call 02 9223 9166 or submit an online enquiry at www.quinns.com.au.