Starting a business is a challenge, but there are many areas you can focus on to ensure that your business stays afloat beyond the first year and continues to be successful. We asked several small business owners and executives to share 20 mistakes that new business owners should avoid when starting 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 companies do not survive beyond the fifth year. So how can you successfully launch and run your startup?One of the biggest errors that new entrepreneurs make is trying to do everything themselves.
It's understandable that you want to be in control of every aspect of your business, but it's important to remember that you can't do it all. It's essential to learn how to delegate tasks and trust others to complete them. This will help you become more efficient and allow your team to achieve better results. If you could go back in time, you would know that it's important to trust your team members and delegate work effectively. Another mistake that many startups make is ignoring research.
As Time magazine described in 1959, Al Edsel was “an Oldsmobile sucking on a lemon” when Coca-Cola decided to discard its star drink in 1985 and start over with a product it called New Coke. The company underestimated the power of brand loyalty and failed to realize that taste isn't always based on actual taste. This was especially true for Coca-Cola customers in the Southern U. S., who were loyal to the brand despite the change.
Fortunately, Coca-Cola had enough money to weather the storm. When Ron Johnson took over as CEO of JCPenney in 2011, he made several changes that had a negative impact on the company. He eliminated discounts in favor of something he called “fair prices”, changed the company logo for the third time in three years and pushed for brands like Levi's to open their own “mini-stores” within JCPenney locations. He also fired hundreds of people from the company's headquarters in Texas and thousands of middle managers from across the country, as well as the company's former advertising agency. In hindsight, these decisions were a big mistake.Patrick Burke, a lawyer, public accountant and serial entrepreneur, says he has made most of these big mistakes and has (barely) lived to tell them.
Members of the Young Entrepreneurs Council have also made mistakes in their past and current leadership roles, but have learned important lessons from them. Don't be afraid of failure; instead, learn from your mistakes and adjust your business model accordingly. One mistake that may not seem like it is keeping an employee who doesn't fit well with the culture. Another common mistake is hiring too many people instead of the right people and spending money on marketing without having a well-defined process for managing sales. It's also important not to get caught up in trying to do everything yourself; instead, focus on what you do best and delegate other tasks accordingly.
Finally, don't forget to prioritize correctly; this will help you stay focused on what matters most. We reached out to hundreds of small business owners, growth strategists, financial advisors, legal experts and business consultants to compile these 20 biggest mistakes startups make so you can avoid them when starting your own business.
