Running a business relies heavily on taking risks. But the risks in question should be calculated and accounted for. One careless move may result in dire consequences.
Good entrepreneurs need to foresee as many possible problems as they can and to prepare for them. They also need the help of skilled professionals in the field. Good planning for both the short-term and long-term minimizes the crises and mistakes that will be encountered in the future.
Here are a few major mistakes you shouldn’t make when running a startup.
Not getting professional advice
It’s important to seek advice from experienced individuals in your industry or field. It can understandably be difficult for small business owners to step back and let other people help them, but you have to.
While you see yourself as a well-rounded business owner, there are simply some things you aren’t trained to deal with. Running on a small staff while trying to do so many things is one of the common reasons startups fail. Hiring help will also allow them to focus more on operating the company.
Two professionals that a business owner should ideally tap as early as the planning stages are an accountant and an attorney.
You might think that you’ll only need a lawyer for your small business when you get into trouble with the law, but you’re mistaken. A lawyer can offer their help and advice regarding complex matters such as copyright, contracts, and compliance. For bigger issues like lawsuits, it’s good to have a lawyer on standby.
If you have a run-in with the law and don’t have an attorney, it may be too late to find someone reliable and who can understand your company inside out. While it’s true that you won’t need a lawyer 24/7, it’s incredibly reassuring to know that you have one on retainer.
Meanwhile, while some people think accountants are just for bookkeeping and payroll services, they can be a great help early on. Accountants can secure the necessary permits and licenses for your business. They can also advise you on the structure of your company and how to plan for taxes, short-term and long-term growth, and financial emergencies.
Financial management is vital in running a small business. According to CB Insights, 18% of startups fail because of cost issues. Hiring a full-time accountant early on will help your business succeed.
Not setting yourself apart from the rest
Business is a competition. At the end of the day, there are others out there who can do what you can do – maybe better. Know your weaknesses and strengthen them. You need to constantly innovate and adapt to the changing demands of the market. What can you do and how can you do it better than anyone else?
Find your edge and use it to your advantage. No one ever succeeded because they’re like everyone else.
Not expanding your clientele
Diversifying your customers is essential to the growth of your business. If you have a short list of clients – or worse, a single client – that you find yourself relying on for a big chunk of your income, that’s not necessarily a good sign.
What if one day, they turn to another business? You’re going to need other clients to stay afloat. Having one or two clients that seem loyal will only work if they’re in constant need of your services. Otherwise, you’re functioning more as an independent contractor for very specific and few clients, rather than a business that can cater to a wider market.
Not planning for contingencies
A big part of running a business is crisis management. To prepare for a crisis, set aside resources to deal with it, and still do your best to prevent it from happening anyway. Many startups fail because of insufficient planning – don’t become one of them.
Not knowing what’s happening in your market
You might think you know your market, but keep in mind that it never stays the same. The market changes. It adapts to changes in the environment and economy. Stay on top of emerging trends in business and figure out how you can incorporate them into your company.
This includes adopting new technologies. More and more, we see faster, more efficient ways to conduct operations. Platforms are changing, and if you don’t hop on them soon, you’ll get left in the dust.
As the saying goes, if you fail to prepare, be prepared to fail. Starting and running a business depends on good planning. To achieve that, you’ll need the help and advice of a few experienced individuals, long-term and short-term plans for your business, and contingency plans.
Being in business is all about taking risks, but make sure you know what’s at stake and that you have plans if things don’t go your way.