Thinking of starting a new business! You have landed on the right spot. Here we will talk about the mistakes that you should avoid when starting a new venture. So without adding any further lines, let’s jump to our topic
Things to Avoid
Below are the mistakes that you should be aware of while launching your business. Knowledge about these mistakes would allow you to avoid them before they cause any damage to your startup.
Starting without a Plan
You can’t start a business while just dreaming about it. The most essential aspect of any successful business is its plan. Starting a business without a clear plan would result in some early issues, which usually end up in failure.
Furthermore, startups and new businesses need flexible and contingency plans. This helps in cases when your business isn’t working as expected. Hence, plan every unpleasant situation ahead to eliminate the element of surprise.
Starting Without Registering as an Entity
In order to secure your business, you need a registration or business license. It is essential to operate as an entity. However, it‘s a different process from one that you follow while organizing or incorporating a company. If you fail to register as a Limited Liability Corporation (LCC), the business owner or all the partners would be held liable for the loss.
Before starting a business, make sure to secure an adequate amount of capital or funds. This amount may come from the partners, shareholders or sponsors of a business. If you don’t have sufficient capital to inject into your business for its smooth operation during the initial phase, it may end up in failure.
Relying only on the Industry and Ignoring the Market
In most of the instances, entrepreneurs do a lot of research regarding their industry. However, they make the biggest mistake by undermining the importance of the market. Being a startup, it is essential to analyze whether the consumer is interested in buying your product or services.
Opting for 50/50 partnerships
When two people start a business, sharing 50% of the shares appears to be a just option. However, this isn’t the right concept. This makes it difficult to reach a decision if both the partners disagree.
The 50/50 partnership awards equal rights to both the partners. This permits them with the power to agree or disagree with a decision. Hence, 51/50 partnership is the right option.
Not Focusing on Intellectual Property
The intellectual property (IP) refers to all the intangibles that your business owns. These include copyrights, trade secrets, trademarks, etc. If you fail to focus on your IP, other business would start a counterfeit version of your business.
Choosing Friends as Business Partners
When taking on board your friends as business partners, you may lose control over management. In most cases, friends don’t treat business seriously. Moreover, it is rather difficult to ask some hard questions to your friend.
Working without a Team
Doing all the things by yourself may save you some amount, but later own it may prove to be difficult for you to handle the business. Hence, hiring an accountant, attorney, and banker is essential to keep your business running smoothly.