by Nate Vickery, editor-in-chief of Bizzmarkblog.com
Running a startup business can often be a double-edged sword. As one might think, the investments and potential profits are enough to lure business owners into potentially dangerous situations. Some get too greedy, some are not careful enough, and some are just inexperienced enough to overlook an important part of the job.
Business owners usually make the same mistakes that ruin them early on.
Skipping Research.
Some business owners have a gift of confidence that allows them to think that with a great idea they can accomplish anything. This is quite the wrong attitude for a startup business.
In order for an idea to become a profitable business, proper research of the market must be conducted. Otherwise, an idea will be crushed and business will close for good. Most successful startup businesses are already based on someone else’s recycled idea. Someone made a mistake – someone corrected that mistake and made a business out of it. Without research, your product might get ignored and your competitors will eat you alive.
Not Listening to Customers.
Customers are your main source of income. If they are not satisfied with your product then they won’t buy it and you won’t generate any profits. Business owners often neglect customers early on by focusing on plans for the future. This is where they are cut down without even realizing it at first. Angry customers will leave negative feedback. Also, they will give your business a bad reputation and encourage others not to buy from you.
Over-Hiring Early On.
Hiring employees and managers is important for a business. However, hiring a full staff for your startup will kill it almost instantaneously. When you invest in a product it takes time for that product to generate an income. Without a steady income, you can’t pay the staff their salaries. Not to mention that the management department costs a lot of money. Do things yourself for starters with one or two assistants, if you can afford them. The full staff will only bury you financially.
Financial Crisis.
To understand how finances may bite you in the back, you must understand that sales take time. Return on investment takes around a year to generate steady income, and sales to reach their peak. Now if you borrow money early on, either from someone you know or a bank loan, you might find yourself in a tight spot. Having to pay off the loan before you generate enough incomes may force you to shut down the business.
Also, you must be very careful about your product’s quality and the advertisement of that product. Misleading customers with false advertisement about your product will ensure an invasion of lawsuits from the consumer fraud lawyers that will make you go bankrupt in a blink of an eye.
Don’t Mess With the Law.
There are many laws and regulations for running a startup business. If you don’t want to get crushed by the law, then you should really pay attention to those regulations. You’ll have to watch out for taxes and all kinds of licenses, as well as any other legal obligations and red tape. A good piece of advice would be to hire professional assistance to sort all the legal issues out. Hiring a lawyer and an accountant will prevent your business from being shut down due to illegal activity.
Holding on to a Wrong Idea.
Sometimes in the life of your business, your initial idea will have to change. Your business plan will evolve and so will your strategies and campaigns. If it starts to fail in both revenues and sales, don’t be afraid to change it. Protecting your original idea just because it’s your “firstborn”, may lead you down a path to ruin. If you want to run a successful business, you will have to be innovative.
Don’t Plan Too Much.
Of course, an entrepreneur with a startup business will have a ton of ideas on how, where and why to improve their business. However, planning too much can sometimes be counterproductive. If you sit down on your ideas and start planning on ways to incorporate them – you may find yourself planning them to perfection and then realizing that someone else has already used your idea for their business and made millions. Don’t over think, act upon your ideas, analyze parts of them and test them out. You never know which idea will be a big score unless you try it out.
If you want a successful and profitable startup, then do your homework accordingly to your goals. Don’t allow yourself to crash and burn because of some stupid mistake, or by overlooking something vital.
Nate Vickery is a business technology consultant mostly engaged in management and marketing for SMB and startups. Nate is also the editor-in-chief at a business oriented blog Bizzmarkblog.com.
