Common Mistakes Made by New Business Owners and Startups

Unsurprisingly, the stats show us that 60% of new businesses fail within the first three years.

However, many businesses fail because the owners and operators fall into the same pitfalls. Here are four common mistakes startup owners make? so you can avoid them.

 Incorrect Goal Setting

If you haven’t correctly set both short-term and long-term goals for yourself and the business, then you may find that you’re lacking focus and working inefficiently.

As a result, you need to set clear goals that are also SMART:

Specific

Measurable

Achievable

Relevant

Time-bound

By setting goals like this and reviewing your progress regularly, you can ensure that you’re always working in a focused manner that will help your business grow and succeed.

 Inefficient Budgeting

As a startup owner, you’ll know that money is always tight. As a result, when paying all your suppliers is tricky, it feels right to try and cut costs wherever possible.

But, although this is feasible in some areas, such as advertising and office supplies, it isn’t possible in other areas, including legal requirements such as fire supplies.

Remember, if you cut corners on an essential or a legal requirement, it could cost you a lot more in the long-run. So it isn’t worth the risk.

If you feel like you’re struggling to keep up with the bills, make a list of all your expenditures and split it into ‘essentials’ and ‘non-essentials’. This way, you’ll find it easier to cut costs, improve cash flow and create a manageable budget that you can stick to.

 Not Signing Contracts

If you’re lending something to a friend or a family member, relying on a verbal or handshake agreement is absolutely fine. However, if you run your startup in this way, you’ll likely run into legal trouble very quickly.

You’d like to think everyone runs their business in the same way that you do. However, ‘my word is my bond’ doesn’t apply to everyone and you need to safeguard your business against risks, misunderstandings and varying interpretations of the same agreements.

As a result, it’s advisable to draft binding contracts (that have been written by a professional) with all of your suppliers, vendors and investors. Don’t feel guilty asking, too. Contracts help everyone and make all expectations abundantly clear.

 Not Hiring

You may be the one that came up with the idea and the business plan, but you need the help of others if you want to grow the company.

Many founders get stuck in a ‘DIY’ attitude and think they can do everything. However, diversification is key.

Whether you need people to help you pack products, sell your idea or manage the admin will depend on your specific business.

But, before hiring, you should think about how you’re spending your time and what you could delegate. You should also consider your best and worst skills. Then, you can pick candidates who complement your best skills and cover your weaknesses.

Follow these top tips and you’ll have no problem escaping the pitfalls many small business/startup owners fall into.