Starting a business is a daunting task, but there are many steps you can take to ensure that your business is successful and remains afloat beyond the first year. We asked several small business owners and executives to share the most common mistakes that new business owners should avoid when launching their companies. According to the Bureau of Labor Statistics, more than 18% of new businesses fail during their first two years of operation and more than 55% of all businesses don't survive beyond the fifth year. To help you successfully launch and run your startup, we reached out to hundreds of small business owners, growth strategists, financial advisors, legal experts and business consultants to compile the 20 most important mistakes startups make so you can avoid them when starting your own business.
The COVID-19 pandemic has posed an additional challenge for new business owners. Safety measures, such as face masks, hand sanitizer, and plexiglass dividers for staff and customers, can be costly. In addition, at the beginning of the pandemic, lockdowns led to a reduction in spending, which proved a challenge for small business owners. To avoid these problems, it is essential to create financial projections for your new business, especially for the first 12 months. If you're a micromanager or a perfectionist, take note.
The biggest mistake entrepreneurs make is believing that they can do everything on their own. At first, starting a business could mean managing a lot of tasks on your own. But eventually, you must learn to delegate and hire people to help you grow your business. Like any person, you have strengths and weaknesses.
As a small business owner, it's up to you to build on your strengths and surround yourself with people who can complement your weak areas. Don't be afraid of failure; instead, learn from your mistakes and adapt your business model as needed. It's common for entrepreneurs to neglect financial planning and reduce the amount of capital they'll need to start their business. Common causes include not getting enough business funding, forming an inexperienced management team, and not implementing a marketing strategy. I made the mistake of hiring too many people instead of the right people and spending money to fill the top of the funnel without having a well-defined process for managing the bottom of the funnel. If your company tries to cover up a mistake, it's only a matter of time before the news breaks and you're labeled a liar.
A common mistake that can cause a cash shortage is to use your operating cash to pay for long-term assets. That's why it's essential to start the process well-informed and with a thorough understanding of the common mistakes that need to be avoided. Launching a successful business requires careful planning and preparation. To increase your chances of success, it is important to be aware of the most common mistakes that entrepreneurs make when starting their companies. From not getting enough business funding or forming an inexperienced management team to not implementing a marketing strategy or trying to cover up mistakes - these are all pitfalls that should be avoided. Don't be afraid to delegate tasks or hire people who can complement your weak areas.
Make sure you have enough capital and don't forget about marketing strategies or financial planning. Finally, don't try to cover up any mistakes; instead learn from them and adapt accordingly. Starting a business is no easy feat; however, by avoiding these 20 common mistakes when launching your company, you can increase your chances of success. Be sure to prepare financial projections for your new business, especially for the first 12 months. With careful planning and preparation, you can set yourself up for success.
