Entrepreneurship has become one of the most sought after professions in India due to the buzzing startup ecosystem. Today, many graduates aim to become startup founders. But it is not easy to build a company. Getting started is a challenging process that, if not done right, can be a real whirlwind.
When starting a business, there are a lot of things to take into consideration. Some of the most important decisions that must be made are the finances, location, and who your customers will be. In this blog, I discuss some of the mistakes that entrepreneurs can avoid:
1. Make a business plan
Business owners need to be ready for what could go wrong, which is why they should create a business plan. That way, if something does go wrong, they can address it quickly and effectively. Some of the mistakes that business owners can avoid by creating a plan are overspending, not being able to pay the bills, and failing to have the means to sustain a business.
2. Get organized
Starting a business can be overwhelming and trying, but the key to success is staying organized. It is important to know what to do and what not to do. Entrepreneurs often make the mistake of assuming that they can stay organized because they are running a business. However, things can get really messy when you’re not careful. Your business needs to be organized and you should think about what will happen if you don’t.
3. Understand your market and target audience
If you’re just starting out as an entrepreneur, the first mistake you need to avoid is not understanding your market and target audience. If you don’t know who your customers are, how can you expect to grow your business? Before you even think about spending any money, learn about the market. As an entrepreneur, you need to understand the needs of your market and how you can best provide what they need. Your audience is going to have a lot of questions, and if you can provide them with answers, they will be more likely to buy from you.
4. File for the proper legal structure and business registration
For anyone that is starting a business, it is very important to have a plan. There are a lot of mistakes that people make when starting a business and the costliest one is not having the proper legal structure. If you don’t get the proper registration, your business can be taken away and you’ll lose your investments. It is a daunting task to start a business. One of the most important things to do is create a plan on how to establish your business in a legal way. A business structure can be either incorporated or unincorporated. Many people don’t know the difference between the two and it is easy to just decide on incorporating since it sounds more professional. The incorporation process can be time-consuming and expensive, so if you are on a budget, it may not be the best idea. There are many different factors that go into choosing an appropriate legal structure for your business.
5. Don’t partner with the wrong investors
Many entrepreneurs get taken advantage of when they invest their time and money in an investor. There are ways to avoid this, though. First, it is important to look for an investor that has experience in the field you are working in. Second, take the time to do your research and avoid the frauds. They might seem like a good deal at first, but they will cost you time and money in the long run. Entrepreneurs are constantly working to find the right investors to help fund their business. If you’re not careful, the wrong investor could have a negative impact on your business. With these mistakes, it is important to be as prepared as possible before you start pitching investors.
6. Don’t underestimate capital requirements
Entrepreneurs are great risk takers, and they take chances all the time. When you take a chance on something, it could pay off or it could end up hurting you in the long run. As an entrepreneur, you want to find something that can have long-term benefits for your business and brand. There are some key mistakes that entrepreneurs can avoid. One of them is underestimating the amount of capital required to be successful. If you don’t take care of your business, you could find yourself in a big problem.
7. Don’t give yourself the wrong salary
Sometimes it is hard to know when you are ready to step into the next level of your career. Most entrepreneurs know that they need to prepare for a certain salary before they begin. One mistake many entrepreneurs make is not giving themselves a salary that is appropriate for their current skill set. To avoid this, it is important to always know what you are worth and what you should be paid. It’s one of the first things an entrepreneur has to do. The salary is the most important part of a business. Most people are unaware of how much they should be getting and why it’s so important. As an entrepreneur, you should be doing your research and homework on this topic. You need to be well-versed in the average salary for your area. It is also important to understand how much you should pay yourself so that you don’t end up giving yourself the wrong salary.
8. Don’t undervalue your product or service
It’s important to remember that the goal of a business is to provide customers with value. Make sure that your product or service is of high quality. The most common mistake that entrepreneurs make is undervaluing their product or service and not setting an affordable price. The goal is to provide the customer with the best possible experience, which is difficult when your product or service doesn’t live up to its value. A business can take a wrong turn and cause it to fail if they do not have a clear understanding of what their products or services are. The importance of making sure you know what your business is worth cannot be overstated.
9. Implement a proper bookkeeping process
It’s not easy starting a business. For many entrepreneurs, there are so many things to take care of that it can be overwhelming. When you have the potential to make a lot of money, it can be difficult to keep everything organized. As a business owner, you need to learn the best practices in order to ensure that you are always on top of your game. Every business needs to be able to keep track of its finances and plan for the future. However, keeping accurate records can be tough and challenging. With so many different records to keep track of, there is a lot to remember.
10. Create a marketing plan
You are probably familiar with the adage that “the best way to predict the future is to create it.” This is true. If you want to run a successful business, it is vital that you put the effort into marketing your company and brand. When you start a business, it is important to know the potential pitfalls and mistakes that you can avoid. One of the most common mistakes is creating an idealized marketing plan. One needs to know how to create a marketing plan that is tailored to your company and its goals. This plan can help you avoid common mistakes that could result in a poor customer experience.
Avoid while you can!
Based on data provided by the Labor Department, 20% of new businesses fail within two years and half fail after five years. What are the keys to launching and running a successful startup?
Over 100 business owners, growth strategists, financial experts, legal experts, and consultants that were spoken with, helped compile the 10 biggest mistakes startups make, in order to help you avoid them during your startup process.