Businesses, by nature, pursue profit and financial gain. Obviously, this can be achieved by reaching new customers or expanding contracts with existing clients, but this isn’t the only way to increase returns.
If you can avoid common mistakes when you start a new business, you are more likely to succeed. One of the best ways to avoid making mistakes when you start a business is to learn from the mistakes of other entrepreneurs.
Instead, many organizations are getting more from what they’ve got by cutting costs and eliminating pricey errors. Below are a few missteps that cost businesses thousands every year and what you can do to turn those cash-drains into usable money.
Business Mistake #1 – Neglecting Research
One of the worst blunders your business can do is to invest in a marketing campaign, novel venture, or technological integration without thoroughly researching it. How foolish would you feel sinking thousands into an online advertising campaign to an audience that ignores digital ads? It’s much better to spend your time assessing the cost and benefits of a plan from the get-go.
As Sun Tzu says, “If you know the enemy and know yourself you need not fear the results of a hundred battles.”
Just because you want to start a business, it doesn’t mean you know enough about the industry and the market. If you don’t do market research, you won’t be able to create a product or service customers want. Research is a time-consuming process, and it’s a mistake to avoid it. So make sure to learn as much about the industry, the customer, and the competition before you start a new business.
Business Mistake #2 – Starting a business without a business plan
Starting a business without a business plan is one of the most common business mistakes.
Are you thinking about starting a business? If you start a business without a business plan, you set yourself up for failure. It’s that simple.
A business plan will help you stay focused on what matters. Without a business plan, you’ll be overwhelmed by the daily demands of your business. As a result, you won’t be able to stay consistent.
The business plan will help you define your short and long-term goals. And it will provide the blueprint to help you reach your goals. With your business plan, you can stay on track.
Business Mistake #3 – Refusing to learn from failure
One of the biggest mistakes you can make when starting a business is to fail to learn from failure. The only way to make progress with your business is to try and fail. By learning from failure, you will develop confidence in your own business.
Many entrepreneurs fail to learn from failure because they don’t even realize when they are failing. Often, they keep trying to do the same thing expecting a different result. But, if you are going to succeed in business, you have to recognize when you have failed, adjust and try something different.
Your ability to learn from failure can set you apart from competing businesses and help your company to thrive.
Business Mistake #4 – Failing to measure what matters in your business
Similarly, it’s a big mistake to ignore lessons from past successes and failures; and the only way to do this is through measurement. Do you know the return on investment from going paperless? Are you measuring the results of your PR efforts?
Hindsight is 20/20. So, invest in tools and technologies that track your progress and manage historical trends.
Business Mistake #5 – Underestimating how much money you need to start a business
Underestimating how much money you will need to start a new business is a huge mistake. Some businesses like restaurants or biotech companies can be expensive to start. But even service businesses like web design or copywriting require some startup capital.
Before you start a business, understand the costs involved. Make sure you understand the funds required to start a business. Then, double the amount you have estimated and it might be enough money to start your business.
Business Mistake #6 – Lack of organization
Failing to get your business organized is a major mistake. Starting a new business can feel overwhelming, but you need to keep your business organized. It’s the only way to avoid chaos, which could lead to business failure.
If you run an organized business, your employees will know what to do every day. And it will help them do a good job in your business. An organized business has systems in place to minimize confusion and maximize success.
Business Mistake #7 – Failing to delegate
Failing to delegate is a huge mistake when starting a business. Many entrepreneurs are workaholics. But, it’s a mistake to try to handle everything on your own. It’s true that the best entrepreneurs understand every aspect of their business, but they don’t try to do everything themselves.
If you want to succeed in business, you should take advantage of the expertise of others. Working with a team will help you succeed in business. They’ll help you start a business the right way, keeping you focused on what really matters.
It’s a mistake to refuse to learn how to delegate. When you start a business your job is to delegate to make sure all tasks are done.
Business Mistake #8 – Spending too much on employees
Spending too much money on employees is a mistake when starting a business. It’s great to hire people to help your business grow. But hiring too many people too fast can put you out of business.
Every office needs reliable and dependable teams in-house, but it is sometimes cheaper to hire an agency to tackle specific tasks, like one-off marketing campaigns. Additionally, internships and outsourcing are affordable alternatives to delegating redundant duties.
Business Mistake #9 – Hiring your friends if you can’t manage them
Hiring your friends is a mistake when starting a business. It’s fine to hire your friends when you start a business, but it’s a mistake if you can’t manage them. An environment where you work with your friends can be a lot of fun, but you need to keep it professional.
Clearly define responsibilities if you hire your friends. Make sure everyone understands what’s expected. Failing to define roles and responsibilities can destroy your business and end your friendships.
Business Mistake #10 – Poor Communication
A business is only as capable as its employees, which is why it is absolutely vital to provide workers the tools and technologies they need to communicate effectively.
Consider investing in collaborative technologies like internal chat platforms, video conferencing services, or social software.
Business Mistake #11 – Inadequate money management
Poor money management is a mistake when starting a new business. When you start your business, your spending habits will have a huge impact on your business. If you fail to manage your cash, your business will suffer sooner or later. Your business may do well today, but once there is a slow down in your business, poor money management will catch up with you and it may destroy your business.
Business Mistake #12 – Lost Documentation
File cabinets, for the most part, are a thing of the past. Instead, employees prefer to store valuable data and documentation digitally. But that doesn’t mean files can’t get lost in the shuffle. Incorrect file names, external hard drives, and poor box service protocols can quickly bury important documents.
Stymie this administrative headache by requiring every employee to save their documents in a shared cloud platform.
Business Mistake #13 – Redundancy
Sometimes redundancy in a system is a good idea. It’s nice to know that your business won’t come to a grinding halt just because an employee left the company or because a specific technology is experiencing difficulties. However, an overabundance of similar tech, labor, or data can do more to drain money and resources when you need it most.
Examine your operations and nix cumbersome redundancies.
Business Mistake #14 – Inventory Hiccups
Sometimes manufacturers or supply chains fall prey to unavoidable errors, which can really muck up your operations. While these issues may be out of your control, you can make smart moves by addressing the problem right away with robust enterprise resource planning software.
Kenandy, for example, is an inventory management system built on Salesforce that gives real-time insight into the supply chain, manufacturing, and more, for multiple departments.
Business Mistake #15 – Eschewing Cloud Computing
We touched on this earlier, but it bears repeating. The cloud is infinitely scalable, easy to access from virtually any web-connected device, and is safer than many on-premises data stacks.
If you really want to cut costs and boost productivity, it’s time to embrace the cloud. You don’t even need to backup hr or any other data stored in the cloud.
Business Mistake #16 – Overinvesting in Office Spaces
Finally, look at your office space. Does your building have a fountain in the lobby, an overabundance of conference rooms and floor space you couldn’t imagine filling in the next two years? It might be time to downsize to a cheaper office.
Once you have eliminated many of these expensive business mistakes, you will likely discover you have created a more efficient workplace that encourages employees to spend more time on customers and clients. This, of course, will result in a happier customer experience and greater profits for your organization. Now that’s something spectacular!photo credit: danielfoster437 Glass Architecture via photopin (license)
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