It is difficult to start a business. It’s even more difficult to keep going. According to the Bureau of Labor Statistics, 20% of businesses fail in their first year, and 50% fail by the fifth year. However, you may improve your chances of success by avoiding these 5 frequent business launch blunders.
Expensive Mistake #1: Not Planning Adequately.
Spend the time and money necessary to develop a thorough business plan. Make a financial plan. Consider your goals for the company as a startup, as well as one, five, and ten years down the road. Make a list of your objectives. Consider hiring a business coach to assist you in developing your strategy.
Expensive Mistake #2: Not Doing Your Research.
Examine the market for your intended product or service thoroughly. What is the level of demand? Who are the people you want to sell to? Consider hiring a market research firm to conduct a poll of your ideal potential clients. Talk to people who work in the same field as you. Gather as much information as possible so you can find traps that others have fallen into or avoided. Don’t limit yourself to friends and relatives when conducting your study. Seek for objective feedback from clients or other business executives.
Expensive Mistake #3: Not Forming a Legal Entity.
Some new business owners try to construct a legal entity on their own (or worse, don’t form a legal entity at all!) This is a huge blunder. While there are internet programs that claim to assist you incorporate a corporation or limited liability company, you’d be better off seeking legal advice. Simply forming an LLC isn’t enough. It must be carefully managed, otherwise, it will become a useless piece of paper (which Legal Zoom would not tell you). To avoid piercing the corporate veil, acquire a separate tax ID and business bank account for your LLC, and keep your company and personal activities distinct.
Expensive Mistake #4: Not Delegating.
You may be able to build your own website, answer your phone, pay your taxes, handle your books, communicate with consumers, design new goods, and manage your business’s affairs, but don’t put off delegating this task for too long. Consider employing a virtual assistant to take your calls, return them, and schedule appointments for you. To build your logo, branding, and website, hire a graphic designer. Don’t waste your time tinkering with Quickbooks. Spend your attention on activities that generate income and outsource the rest.
Expensive Mistake #5: Not Getting Agreements in Writing
Every contract you make with a client, vendor, or employee should be written down. The terms of the commercial connection or transaction should be specified in the agreement. You should have written terms and conditions on your website if you sell products or services online or have other important material. A company lawyer can assist you in drafting well-drafted contracts that include all important elements and are written to safeguard your interests. You can also have your lawyer evaluate contracts that vendors have given you. When you don’t get things in writing, you’re much more likely to end up in court.