How To Avoid the Most Common Pitfalls of Starting a New Business – On the path to starting a business, it’s likely you will face many difficulties. It’s a known fact that a significant percentage of newly created companies fail after just three years of operations. The good news is that your business does not need to be one by starting out on the right foot and with adequate planning. Here, we will discuss how to avoid the most common pitfalls of starting a new business.
What Are the Pitfalls to Avoid?
Setting up your own business is admirable, but it can be a source of success or failure when you don’t know how to approach it. To create a successful business, you must be aware of the steps you need to take and the pitfalls you may face. Unfortunately, entrepreneurs often fall into the following traps:
Expect immediate success from your business
Wanting to do everything alone
Having overly complex strategies
Setting unrealistic goals
Not securing finances
Marketing and Communications
Communication and marketing are fundamental aspects for small businesses to consider. Without it, you can offer the best products and services or be the most credible business on the market, but nobody will know who you are. Your communication policy must allow you to connect with all possible customer audiences. You must develop a marketing action plan to attract customers to your products and services.
Nowadays, this means being visible through websites and social media. As we’ve outlined here on WomenTalking before, in our ‘Trends That Will Impact Marketing and Your Business’ article, trends and engagements are constantly evolving, and without a good communication and marketing policy, you will struggle to compete in the market.
Protect Against Fraud
Startups or small businesses can overlook fraud protection, thinking that it is something only larger established companies need to be concerned about. This is a massive and often costly pitfall that smaller businesses fall into. All companies, big and small, need to protect themselves against transaction fraud when accepting online payments.
Implementing adequate security and protecting your business against fraud is a vital step not to be overlooked. Worldwide transaction fraud, including the use of stolen credit card numbers, is in the billions. Thankfully, there are many accessible and easy-to-use tools for business security. For example, seon provides anti-transaction fraud solutions that work with large and small businesses alike. This technology works with the use of artificial intelligence and machine learning by analysing transactional data and flagging fraud if detected. Small businesses mustn’t overlook this type of protection, as, unfortunately, cyber threats are on the rise. A successful cyber-attack could cause significant damage to a business’s reputation and cause them to lose customers.
Market Research and Business Plans
To effectively launch a new startup or small business, it is vital to conduct adequate market research and create an achievable business plan. Market research will allow you to analyse the economic environment and understand if your product or service meets the target audience’s needs. You can get an overview of your competitors, potential customers, and collaborators through a practical market study.
The business plan then formalises your business project. It should contain a description of what your business does, how you will meet your goals, and how you plan to make a profit. Of course, all new companies will have a plan business plan of some kind, but many fall into the pitfall of making inaccurate financial projections, giving generic market analysis, or changing plans.
Engaging With Others
Keeping your ideas to yourself is another mistake to avoid. Not involving those close to you at the start of your business is a bad idea. The people around you are your first customers, especially for smaller businesses. The more you involve your family and friends, the more they will help you develop your business.
Family and friends are your greatest allies and a source of support, advice, experience, and constructive criticism. In trying to understand your business idea, they will ask questions you may not have thought of yourself. Having questions and input from others will allow you to understand certain aspects of your project that you could not perceive.
Branding and Logos
Your business logo is the first connection to customers and investors. The branding and logos you choose reflect the image and identity of your company. You must therefore choose your logo or sign carefully. Unfortunately, some newly created small businesses end up with an amateur logo. Or trying to be original, some companies opt for overly complex logos, which works against them. Business branding and logo should be, of course, original but also simple and understandable.
There are many logo creation tools, both paid and free. For example, BrandCrowdcreates customised logos that are professionally designed, allowing you to adjust colours, font and layout. You should avoid making your logo or buying a logo that has already been designed. This will prevent you from having a logo that misinterprets your company’s brand image.
The financial management of a company is not to be underestimated. For a newly established business, control over the income and expenses you make is critical. Neglecting accounting matters will mark the beginning of costly challenges for a new business. Some small companies fall into the trap of recording operations and budgeting in a simple and outdated manner.
Down the road, your business’s day-to-day activities and finances will become far more complex. It would be best if your business took advantage of the tools that will allow you to ensure better accounting management of your business from the get-go.
You will find it challenging to achieve success without the knowledge and input of experienced individuals. Business startup assistance is invaluable. The services of an expert or company in the creation process of your business will help you avoid unnecessary and costly mistakes.
No matter how great a business idea or plan is, you should remember that you are not an expert in everything. The more advice you get from experienced people, the better prepared you will be for the various possibilities that await you. For example, there is a variety of legal forms that your business can take, whether a sole trader, general partnership, Limited liability partnership (LLP), Private Limited Company (Ltd), Public Limited Company (PLC), etc.
A business structure must be objective and depend on the advantages, obligations, and tax implications. Therefore, seeking a professional’s help for legal matters is essential. This way, a small business can fully understand the conditions and requirements before creating its company.
Creating a business is one of the most challenging projects and most significant decisions you will make in your life. Being aware of potential pitfalls and how to avoid them will put you on the road to success.