Avoid Startup Mistakes – While You Grow.
Starting a business is never easy. There are so many things to think about and decisions to make; the pressure can cause you to make poor decisions that can hurt your potential for success or set you back.
While there is no fool-proof plan to reach small business startup success, many new business owners make several common and dangerous mistakes that can negatively impact their businesses.
So how do you successfully launch and run your startup?
We researched advice from numerous sources. Here is the compilation of our thoughts.
You will be able to skip mistakes if you:
Make sure you have plans.
- Business plan with detailed market research
- Financial plan by month for three years, if inventory required, then expand to five years.
- A financial plan, if you are manufacturing, your project would extend for five years.
- A marketing plan supports your financial goals.
- Use measurable and adjustable metrics.
- Focus on customer acquisition as the key metric.
- Be prepared to make adjustments as you gain customers.
- Continually create the means to analyze customer behavior and seek feedback.
Value your products/services appropriately.
- Research your best price for your offerings.
- Start with pricing that is consistent with the market.
- Feel confident in your pricing.
- Only lower your prices based on the potential of a sale, but be cautious not to go beyond 10% unless the volume makes sense.
- Recovering from undervaluing creates a “big whole” from which it will take time to recover.
Choose essential technologies to start.
- Use trials to determine what works for your business before signing up for annual contracts.
- Decide on month-to-month SaaS subscriptions to limit expenses.
- Learn from YouTube videos as to how to maximize your knowledge of apps.
Use social media marketing.
- What are the attributes of your ideal customer?
- Learn how to focus social media on your ideal customers.
- Update your ideal customer when you have the customer(s).
- What is the best type of marketing for your business and your target audience?
- Be prepared to pursue customers/clients, do not expect customers/clients to find you.
- Narrow your message to focus on that market segment.
Monitor your spending.
- Negotiate all ongoing expenses into smaller amounts, so there are no significant amounts spent.
- Watch your spending before you have revenue coming in.
- Ensure suppliers are not asking for commitments more than a month ahead of your potential to sell products.
- Learn to “walk away” rather the commit to expenses that will create negative cash flow.
- Ask your bank for loans and credit cards based on your business plan.
- Be willing to seek grants or government sources to overset waiting for revenue.
- Know what vendor offers discounts.
- Pay as required, not sooner than needed, unless you are saving money.
Surround yourself with mentors and experts.
- Surround yourself with wise counsel.
- Incentivize four to six experts to guide your progress.
- Join associations for your industry, startups, or expertise groups.
- Hire experts only after you have a customer.
- Provide a clear vision and direction to your mentor so that you can receive relevant advice.
- Share your struggles and obstacles with members of your associations.
- Build confidence in your vision and accept feedback.
- Understand that your plans will need to be adjusted.
- Do not be unwilling to modify your ideas as reality or advice requires changing.
- Be comfortable with changing and adjusting.
- Determine the correct legal structure for your business.
- Chose a method for you to know what’s required each day, week, and month.
- Develop a daily task list.
- Start each week with a priority list.
- Set-up reminders for payments.
- Prepare your “elevator speech” to discuss your business at every opportunity.
- Use contracts for your business, even with friends or business associates you trust.
- Know your cash flow daily.
- Project cash flow for rolling weekly cash.
- Hire only when you can sustain the costs of an employee.
- Give yourself a salary you can afford.
Your start is not a single person working alone – surround yourself with subject matter experts and mentors you can lean on and learn.
We hope that we have given you advice for building your business. Yes, some mistakes are inevitable.
Adjust your expectations accordingly in the future.
Do not be afraid of failure; instead, learn from your mistakes and pivot your business plans as needed. Test new ideas and acquire feedback so you can tweak your product to meet customers’ needs better.
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