Starting your business is a path played out with many challenges, especially if it is your first business. Entrepreneurs with little prior experience that are going in the business world face trouble managing startups, which can lead to failure of the business idea.
The fact that almost 50% of all small businesses fail within 5 years due to poor business plan execution, wrong business idea, lousy location, or not enough financing. However, this is not something that should discourage you from your dream of being your own boss. You should continue to pursue your dream and do a lot of research in order to come up with a winning business strategy.
In this article, we will go through some of the common startup mistakes that can ruin your business plan.
1. Going in the process alone
There are not many successful startups that had only one founder. This means that for starting a new company, you need 2 or more individuals in order to create a successful business. Since the process is going to be very hard, you will need the right support, not just from your partners, but from your friends and family.
2. Avoiding the business plan
The importance of the business plan is often underestimated by entrepreneurs. Having a solid business plan is crucial for determining the success of your business. Laying down the whole process on a piece of paper before you start will give you answers to questions like what is the purpose of the company? Which are your potential customers? Your mission? What competitors are you going to be facing? And etc.
Facing all of these situations without a business plan means that you are going in unprepared, and every single problem might be your last.
3. Managing money incorrectly
As we mentioned before, one of the most common problems that startups struggle with is financing. However, once you start your business, managing your financing is one of the most important things.
One of the biggest mistakes is spending too much, which happens when the business owner or founder becomes overly confident and eager and hires many people and does not manage resources the right way. Even when you start to see some money income and your business starts making profits, it is crucial that you have a strict financing plan, and avoid spending too much money on unnecessary things.
Since you don’t have a lot of capital and you are unaware of the future business income, it is very important that you spend that money wisely. One mistake can ruin your business down to the ground.
4. Thinking too small
Obviously, it is essential that you dream big enough. Thinking outside the box and having an optimistic plan is crucial for creating a successful business. This will keep you going in times that will be hard for your business, and you will not be satisfied if your business is not running as predicted.
5. Too much influence on your business idea
We all need people to support us and provide vital advice, criticism, or feedback that can help our business success. Sometimes, the solution to the problem is right in front of you, but you cannot notice it, and you need someone else to point it out. However, too much influence on your business by others can have negative effects.
You should always believe in your dream and imagine your business the way you like it. It is just like the New York Jets, who had a dream of winning the Super Bowl back in 1969, even though they were considered underdogs. This dream of theirs later came true. The same situation is with Mark Zuckerberg that took Parker’s advice to move to California, and he still kept his vision for Facebook.
These are some of the most common startup business mistakes that might bring your company to the ground. However, creating a successful small business is not impossible. All you need to do is proper research, analyze, and translate that into specific planned actions.