6 Costly Mistakes of Starting A Business

A blog that talks about common mistakes new entrepreneurs make. Don’t make rookie mistakes, learn the basics of entrepreneurship with free guides from DH Financial Solutions. 

You’re excited because you’ve just launched your own business and are finally on the path to entrepreneurial success. But, what I often see is people making costly mistakes from the very beginning that could derail their path towards achievement.

Starting a business can be a daunting task for anyone. There are so many things that you need to consider before starting your own company. From the type of business to the location, there is a lot to think about.

Here are 6 costly mistakes that new entrepreneurs make when starting their own businesses:

1. Not having a business plan

You might think that having a plan would only slow you down, but it’s actually a huge advantage. You need to have a solid plan in place before you start your business. This includes everything from hiring and training employees, to creating marketing materials and sales presentations, to setting up how you will handle customer complaints or returns. This will help you avoid wasting time and money with unnecessary expenses.

​​Make it a point to creating both short- and long-term goals, and make them clear. Don’t just say, “I want to make $1 million this year,” but instead set a realistic purpose and then figure out how to get there.

2. Not setting goals

Once you have written your business plan, set goals for yourself and make sure they are realistic and attainable. You should also make sure these goals are measurable so that you can see how close you are getting to achieving them as time goes on.

3. Not knowing how much money you need

This seems like a simple mistake, but it’s actually common among new entrepreneurs. You need to know how much money you need before starting up any kind of business — even an online one — because it will help determine what type of startup costs are involved (such as equipment and supplies). Take into account your expenses and finances and learn to spend enough, but not too much.

4. Failing to understand your target audience

If you don’t know who your target audience is and how they’ll respond to what you have to offer, then it’s going to be very difficult for any marketing efforts that you put forth to be successful. 

The best way to figure this out is through research and by asking questions like: Who are my competitors’ customers? Where do they hang out online? What do they look like? What kind of content do they consume? What kind of offer would get them interested in my product/service? Take time to research your market audience. 

5. Not hiring professionals when needed

If you want your business to succeed in the long run, then it’s important that you hire professionals when needed — whether it’s accountants or lawyers or graphic designers — as this can help. Hiring people who know what they’re doing can save you time and money in the long run and avoid costly mistakes.

6. Being too afraid

“Only those who dare to fail greatly can ever achieve greatly.” – Robert F. Kennedy

Being scared of failure and rejection is understandable, but letting yourself become incapacitated by this fear can significantly hinder your progress. When things are going well, it’s easy to get distracted by new ideas or opportunities. 

Do yourself a favor and commit to staying focused throughout your path, especially as you start to make some money and “bigger and better” chances appear.

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Take Action

Though the rate of business failure in the first two years is around 20%, it doesn’t mean that you have to fail. Through research, planning, and flexibility, you can avoid many of the pitfalls of a new business. Take your time to prepare everything you needed. And it’s certainly better to hire a professional who knows what they’re doing than try for yourself and make a costly mistake!

Resources

https://www.entrepreneur.com/article/245344

https://firsthand.co/blogs/general-articles/6-mistakes-every-entrepreneur-should-avoid

https://medium.com/swlh/6-costly-mistakes-to-avoid-as-a-first-time-entrepreneur-c4796fe22695

https://www.investopedia.com/financial-edge/1010/top-6-reasons-new-businesses-fail.aspx

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