This is the time of year when a lot of people tend to step out a try new things. For many, one of the goals on their list is to start up a company. That’s definitely an ambitious (and respectable) effort that can open a lot of doors to new opportunities. However, being that over half of all companies close their doors within the first five years of opening them, we figured that it would be a good idea to share with you five of the most common mistakes that a lot of them have made in hopes that you can be a long-term success story and not a “first time business casualty”.
Failing to do thorough research. Although you may have a really great idea for a company, that doesn’t automatically or necessarily mean that no one else has thought of something similar. The reason why it’s a good idea to do research on other businesses that may be like yours is because you want to make sure to “tweak your concept” so that it will be totally individualized. Also, you don’t want to create any kind of unnecessary competition for yourself in it can be avoided.
Not creating a brand. One of the most important things that you can ever do for your company is develop a brand for it. This would include having a mission statement for the company, deciding what demographic you want to service and also creating a logo and slogan. When it comes to your website, Facebook fan page, Twitter account and any other marketing that you may do, you want to make sure to keep a consistent look and feel for your company’s platform so that customers will naturally certain things with your business.
Not keeping accounts separate. Sometimes when people are first starting out, they don’t see a real need to keep things like their business expenses and accounting separate from their personal records. For a while, it may go smoothly. That’s until tax season rolls around and you realize that you’re having a really hard time keeping all of your receipts in order. That’s why it’s best to have a business banking account, credit card and accounting system. It will make things far less complicated both mentally and financially.
Hiring more than you need. It’s great to have big goals for your company, but during the first couple of years, you need to make sure that you don’t spend ahead of the profits that are coming in. For that reason, don’t hire more staff than you need and think long and hard about if they need to be full-time, part-time or even freelancers. You can save yourself a lot of money and resources by contracting people or having someone telecommute part-time until your business is more (financially) secure.
Failing to have legal knowledge. As you’re looking online for information on starting a business or you’re checking out a business research guide or two, business experts and entrepreneurs will probably mention the fact that another huge mistake that many businesses make is not having the proper legal support. Now while it would be nice to have a lawyer on retainer, for starters, just make sure that you have valid contracts, non-disclosure and intellectual property agreements handy. You don’t want to spend more time in court than you do at the office simply because you did not have your (legal) paperwork in order. Your company deserves to be protected and the right legal documents on file will help to do just that.