Starting your own business can be incredibly exciting – and maybe even daunting. But before you jump in the deep end, read the five pitfalls that all startup businesses risk falling into.
Everything takes longer than you planned – much longer
It doesn’t matter how well-thought out your plan is, or how well you manage your startup business – everything will take longer than you thought.
Whether it’s because it takes a while for customers to catch on, or it takes longer than you’d hoped to get the money you need to run the business, you’ll find that running a startup business is never as smooth as you thought it would be.
To make your startup business a success, you need to get used to the idea of adapting how you work.
The market has changed but your business plan hasn’t
Markets are constantly in flux and there’s nothing you can do about it. But if you fail to update your business plan to reflect changes in the market in which you operate, your startup business is going nowhere.
You should make changes to your business plan every few weeks to ensure your startup business doesn’t become irrelevant before it even gets going.
Your startup always needs more money
As accountants, we know that money is the most important aspect of running a business, whether that be profit and losses or cash flow.
Nobody, or no business, ever has as much money as they’d like. This is especially true for startup businesses, who almost never truly understand just how quickly they will burn through their money. If you’re not careful, you’ll run out of money before you even get any revenue.
The best way to take care of this is by ensuring your accounts are understood and kept up to date, and that you manage cash flow effectively so you know exactly when you are likely to run out of money so you can take action to secure more funding.
Your startup business is going nowhere without good marketing
It doesn’t matter how exciting or revolutionary you think your business is, the people who you want to be your customers are unlikely to care until you put significant time, effort, and money into your marketing.
Any free word-of-mouth marketing you get is great, but you’ll get most of your customers from your startup business actively marketing its products or services.
The money and time it costs might put you off at first but the investment will be worth it when it generates income through new customers.
Your startup doesn’t have the right people
People are the most expensive thing for a business of any size and good people are even more expensive.
You should see the money you spend on your employees as an investment – they may cost you a lot of money, but if you choose the right people they’ll be the ones helping you grow your startup business into something much bigger and more successful.
This means not relying on friends and family because they might not be so helpful when things get really difficult.