The Top Five Mistakes New Business Owners Can Avoid
Starting a new business has a lot of moving parts and there are many opportunities to make mistakes.
Starting a new business has a lot of moving parts and there are many opportunities to make mistakes. As a business coach for twelve years, I have witnessed and documented over a hundred different mistakes. . With the right guidance and being armed with quality information, you can avoid making most.
People starting a business tend to be focused on one or more of these things:
- wanting freedom from a job or wanting to be their own boss
- wanting something that provides a more flexible work schedule
- wanting something that has unlimited earning potential with a goal of making six or seven figures
- wanting to bring their idea or creation to reality
No matter what your reasons, if you make any of these top five mistakes it will kill or cripple your business. Recovery from these mistakes, if recovery is even possible, is usually slow, painful and expensive.
Another unfortunate side effect is that the recovery phase often drains the excitement and passion for the idea out of the business owner.
Are you ready to find out what the top five mistakes are so you won’t make them?
Mistake Number One
The number one top mistake a new business owner makes is starting a business before they are ready.
Being ready to start a six or seven figure business means that as a business owner you are physically, mentally, emotionally and financially healthy. Starting most businesses requires physical health. This doesn’t mean you have to be at your ideal weight and bench press 200 pounds. Long hours, stress and learning new things can be draining and being healthy when starting a new business is smart.
If you’re on the verge of a divorce, are in the middle of a custody battle, have a dying parent living with you or have any other emotionally draining event going on in your life, handle it, then start your business.
Being financially healthy can mean different things to different people. So I will say, you do not have to be rich to start a business, but you also can’t be broke.
Now I know there’s some stories about people being broke who have started businesses. Those people are the exception, not the rule. If you need your new business to pay your rent the first month it opens that’s not a good position to be in.
Being ready also means that you know exactly who you are. What are your skills, strengths, goals, weaknesses, values, needs, wants, etc.
Lastly, being ready means that you are prepared to spend the first year to two immersed in the business as well as working on the business.
Some see this commitment of time and energy as a small sacrifice to make for financial freedom later and have arranged their life to dive right in.
Others think that nothing else in their life needs change and they can throw start a business into their regular schedule like they might add in an extra workout out at the gym. If this describes you, you are on your way to making top mistake number one.
If you aren’t sure whether or not you are ready in all the areas mentioned above, hire a certified business coach. I highly recommend that they are not only certified, but also have business startup experience. You need knowledge and support at this time.
Mistake Number Two
The number two top mistake people make when starting a business is to not do the necessary research.
For many, research is really boring, not fun, and time-consuming part, but it can be the difference that separates success and failure.
You need to know if there is a need for your product or service. Is there a market for your idea? What are the overhead costs associated with launching your business? In other words, what are the necessary tools and services you will need to get things off the ground? What are some of the challenges being faced by other companies offering similar services that will provide you with opportunity?
Mistake Number Three
The number three top mistake people make when opening a new business is not planning.
By planning, this means writing a business plan that includes financials and writing a marketing plan that outlines how you will get the word out about your business to attract clients.
There’s an old quote that states: “If you fail to plan, you plan to fail.”
Business planning isn’t as fun and exciting as just doing things. However, if you don’t have a plan, how do you know if you are doing the right things in the right order to get to the desired result? You don’t.
Mistake Number Four
The number four top mistake new business owners make is not properly setting-up the infrastructure of their business.
Depending on what type of business you are opening, the infrastructure necessary is different.
Infrastructure requires the skill of strategic thinking and detail-orientation which are two characteristics most entrepreneurs don’t have, so they often gloss over this step thinking they’ll have time to incorporate it later. Some infrastructures require an investment in technology and new businesses can be hesitant to lay out the cash for this upfront.
However, if your business requires a certain infrastructure and you don’t put it in place, your story will be short lived.
Mistake Number Five
The number five top mistake new business owners make is not establishing a strong support system.
Many people who start new businesses have come from corporate environments. Although the environment may have been driving you crazy, it did support you with having an easily accessible group of people to pick from if you needed to get a second opinion on an idea, vent about a tough phone call or borrow resources.
Since over half of all new businesses are home-based which for many are synonymous with being isolated creating a strong support system is essential to success.
I have witnessed and documented over 100 mistakes made by business owners starting out, but if you can avoid making these top five you may be well on your way to enjoying the life of a six- or seven-figure business owner.