If there is a trick to starting a business and doing well at it, it’s recognizing that you’ve got the right stuff to succeed. If you didn’t, you’d be an employee. Just the fact that you have the courage to venture into the unknown, to step well outside your comfort zone, means that you have more than enough knowledge, experience, and initiative to make it all work out.
Here are five mistakes to avoid when you start your own business:
You need to know how much money is flowing in and out of your business at all times. If sales are slow, you need to dial back on your spending. Then, when sales are high, you need to put some aside as reserve funds. In other words, watch the bottom line to keep things under control.
Although you need to stay on budget, you don’t want to be too tight. Spend money on assets—equipment that your business will need to make money. When you’re starting a business, you can’t skimp on getting all the equipment that you will need. This also includes any software. For example, if you start a call center, you will need computers, phones, and call center software. You need to be able to fit all this in your budget. If you don’t have enough, then cut back on liabilities, expenses that don’t earn money.
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It’s easy to get so immersed in starting a business that you find yourself working from early in the morning until late at night. While this type of schedule might help you build momentum for getting your business off the ground, you need to scale back and resume regular working hours as soon as feasible. Working long hours week after week, month in and month out is not sustainable. In the long run, it’s not a great idea to devote your entire life to your business. You’ll first get physically burned out, and then you’ll lose motivation. If you persist past this point, you’ll make some bad business decisions. In short, avoid entrepreneurial burnout.
If you only work by yourself, you’ll be wearing too many hats. And even if you’re a highly talented person, as good with accounting as you are with closing a sale, there aren’t enough hours in the day to do everything well.
Technically, it’s possible to run a robust business entirely on your own. You simply automate many tasks and outsource things that you don’t have time or talent to do. Still, like working long hours all the time, making that your new normal, you will do much better if you can work with a small team. It could be just one other person or a few other people. If you can’t afford to pay a salary, then work with partners. Naturally, you need to have like-minded people on your team. If there is too much of a gap in vision or values, then you’ll have conflicts which will slow down the business.
Initially, you will base your business on the ideas that you outlined in your business plan. These ideas will have been formulated based on your research, previous knowledge, and advice from mentors. While your business plan is a blueprint behind the engine of your business system, understand that it’s not a static process. You’ll discover that some of your ideas are incorrect and that some ideas work better than others. You’ll also stumble upon entirely new ways of growing your business. In essence, then, consider your business plan as an ever-evolving document, one that you’ll refine through experience.
The better you know your customers, the more you’ll be able to give them what they need. You can learn more about your customers by simply observing how they respond to your offers and by observing how your competitors’ customers behave. You should also ask your customers directly. Sometimes they may not want what you think they need. At other times, they would like more of things that you didn’t think important. In addition, frequently asking them, through surveys, through social media, and through other channels, will give you fresh ideas on how to improve your offerings.
It’s always exciting starting a business, but you need to focus on keeping things in balance. Usually this is more difficult than it sounds because there is so much going on. And it all seems to need your urgent attention. Remember, what you don’t know you can learn, and what doesn’t work is just feedback to point you in the right direction.
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