Nightmare mistakes you can avoid in your new business
As a new start-up, these first few months can be worrying times – especially if its your first time running a business. To give yourself the best chance of success, make sure you avoid these commonly made mistakes.
Undervaluing your products or services
As start-ups, we often lack confidence in our ability and have an overwhelming fear of failing. This often causes us to under-price our products and services, as we don’t want to be bold in our prices and put customers off. However, this is can cause all kinds of problems. It actually undermines the value that you offer your customers, and sometimes means that customers go somewhere else because they don't believe you offer a quality product or service.
You'll also struggle more in terms of cashflow and making the business profitable. Your time is worth the money - believe it and your customers will too.
This can cost you in the long term too, as recovering from undervaluing your products is a lengthy process and can mean you lose customers when you increase the price. The bottom line is to research the market thoroughly as you start your business to identify the best price for what you're selling. You can do this by looking at what your direct competitors charge, see what previous products have gone for and/or conduct your own market research – send out questions and surveys to your ideal customers to find out what they want.
Taking on too much
Small business owners are often eager to learn how to be a jack of all trades – that’s what makes them entrepreneurs. You do need to understand all aspects of your business, but this isn't always the best way to become successful. Employing professionals, outsourcing and delegating tasks can be a fantastic way for new small business owners to grow.
You should have time to spend focussing on the core direction and processes of the business that require your specific vision and decision-making, not being bogged down in the daily nitty gritty. It's much better to initially have a smaller offering executed brilliantly, thank to offer lots and not be able to offer a quick and effective service.
Hiring too soon/hiring the wrong people
Contrary to the above, yes, but just as important. When swamped with inundated amounts of work we think that is we hire an assistant or take on an employee, all of our troubles will go away.
If you need help, you can delegate or outsource as long as this won't reduce the quality of the product or service you offer. Outsourcing internationally can be great and cost-effective, but if it increases the time a customer has to wait then you have to weigh this up.
It is also fair to assume that as a start-up, you lack cash. When you hire initially it's likely you'll be paying low wages for an assistant, and unless you're extremely lucky, they aren't likely to care about their work as much as you want them to. You need to be careful that they don't negatively impact your brand image or customer service. Having said that, don't be scared of hiring some help once you can afford it - just make sure you're doing it because you really need it and not throwing away money that could be better spent.
Some new business owners feel that they need to spend a lot ensure they will be better than their competitors or succeed. They will spend thousands and thousands on everything from marketing and furniture, to the most up-to-date software and programs.
There are usually other, less expensive, equally effective options available. For example, check out this post to see how to market your businesses on little or no budget. The best way to ensure you don’t ‘overspend’ is to create budgets for particular segments of your business. This way, you will reduce your ability to spend more than your business can afford.
On the other side of the chart, some small business owners are reluctant to spend money on anything. While there are certainly ways to start and grow a business with restricted funds, you have to make sure you get the right balance.
Not investing in any kind of capital in your business can severely limit your potential for success. For example, if you decide not to invest in a good quality computer system and continue to use the same computer you had back in the noughties, then you will be limited in what you can do and risk severe downtime if something goes wrong.
Being afraid of failure
Yes of course none of us like to fail – in the ideal world we would all get exactly where we wanted every time with complete success. However, we know that this isn’t possible. Instead of fearing failure, when it occurs we should relish from it. Learn from your mistakes and you are one step closer to success.
These are just some of the common mistakes, and unfortunately there are many more! But don't be put off, running your own business can be incredibly rewarding and successful.
If you need any advice or want to talk to people that have been there and done it one of the best places is the Northern Business Expo in March. It's at Manchester Central, and is totally free to get tickets. You'll be able to sit down with people that have successfully started their own business, attend inspirational keynotes, and even have the chance to win £5000 for your business! Get your free ticket today!