Four Mistakes Made When Starting a Small Business

Starting a business is undoubtedly exciting, and something that many people think will be their first step on a path to riches. It’s usually a path paved with good intentions, but often one where people will make a fair few mistakes, especially the first time around.small business

A great many statistics are bandied around about the number of businesses that fail early in their development. One of the scariest is one published in Inc that claims 96% of companies close before they’ve made it to the decade milestone. A decade is a long time, however. Even so, a far more conservative figure from The Washington Post that refers to around half making it through to five years is still something of a warning sign for the unprepared.

With that in mind, this article discusses four easily-made mistakes that can be just as easily avoided. Taking note of them should help people increase their chances of being on the right side of that 50/50 split.

  1. Hurrying into Action

It’s awfully tempting to jump into action as soon as a “great idea” takes root, especially as it’s a way of capitalising on that early sense of motivation. However, it’s far more sensible to throw that motivation into creating the perfect business plan than going “scattergun” with new logos, websites and (worst of all) capital purchases!

Business plans get a bad rap because many entrepreneurs just see them as nothing more than a necessary evil in order to seek funding. In reality they can be far more useful than that.

Ultimately, the main person who should be convinced of the future success of a new business is the person setting it up! The act of putting together a business plan complete with detailed (and realistic) financial projections should uncover potential problems with cash flow or other issues. Doing this instead of moving forward on enthusiasm alone could save a lot of heartache down the road.

  1. Investing Time in Activities that Make No Money

Attention to detail is a great thing, and a very important thing. However, it’s sometimes a huge time drain during the early stages of a company’s development.

Is it really worth spending a day perfecting the invoice template, or multiple days choosing the right WordPress theme for the website? All of these things can be changed further down the line, once the company has launched and is (hopefully) bringing in some money.

There are obvious exceptions to this; Nobody should launch a design agency without a very striking website, or get started as a freelance writer with typos in the marketing materials! However, it’s always worth keeping mindful of whether your efforts are actually moving the company forward.

  1. Proceeding with Inadequate Passion

When people start a business, presumably they hope to be running it for years to come? With this in mind, it’s essential they are sure that it’s still something they actually want to be doing in years to come.

People do make mistakes like this; It’s all too easy to jump into an industry that’s looking like the “next big thing” and chase the money. But if people not going to remain inspired by the concept or the product, it’s still going to become a drag for them to get out of bed for it a year down the line. The best businesses are those that meet where passion and profit collide.

  1. Saving Money on the Wrong Things

Many people try to bootstrap their new businesses, getting them going without any financial help. This is a very noble endeavour, however it’s important not to get into too much of a mentality where saving money is always the top priority.

Nobody should try to run a tech business from an outdated laptop, or expect to pull in online customers using a tacky free website template. There are plenty of ways to save money as a new business, but it’s important to decide on a few key things that are worth spending the money on.

A great many ingredients go into starting a successful business, but often it’s as much about what people don’t do. Avoiding the things above should set entrepreneurs in the right direction.

About Nate Goodman

USA TODAY BESTSELLING AUTHOR Nathan Goodman is a freelance fiction writer and the author behind The Special Agent Jana Baker Spy-Thriller Series. "A terrorist on the loose, a country in panic, and time is running out..." FOR A FREE COPY of book one, visit the author's website.