Everyone makes mistakes. Unfortunately, not all mistakes are made equal. A typo when texting is a lot less catastrophic than failing to budget your company’s finances.
All entrepreneurs run into hurdles—but some issues should be avoided at all costs. If you want to make sure your budding company runs as smoothly as possible, or the blog you decided to start succeeds, read on for four mistakes to avoid in your new business venture!
4 Mistakes to Avoid When Starting a New Business
#1 Getting Ahead of Yourself
When you start a new business, it’s crucial to keep things small at first. If your company expands beyond its current means, you run the risk of overspending on expenses like:
- Too many employees
- Too large of an office space
- Too much product
Study your sales predictions to make sure you’re growing at a manageable rate. When a business grows too quickly, profitability can tank fast. Define clear financial goals you want to accomplish, and only begin building once you’ve reached them.
#2 Hiring the Wrong People
In an effort to get your business up and running, you might scramble to assemble an initial staff. While this might work in the beginning, you’ll quickly realize the devastating consequences that come with hiring the wrong people.
Finding the perfect employees takes time, but it’s worth it when your company is in the hands of a trustworthy team. Follow these steps carefully to ensure your hiring process is thorough and effective:
- Have mandatory qualifications needed for consideration
- Conduct pre-screening and multiple interviews
- Run a thorough background check using a service like ShareAble
- Contact references to fully evaluate candidates
#3 Not Starting an Emergency Fund
As a business owner, you always want to prepare for unforeseen circumstances. After all, life throws curveballs. Business is no exception.
To that end, starting an emergency fund can provide your company with financial security in the event of:
- Broken equipment
- An audit from the IRS (software like iAuditor can make this more manageable)
- Debt collection
- Loss of a major client
Building a reliable savings account doesn’t have to hinder your profit margins. Instead, you’ll want to save a small percentage each month, and let this money accumulate over time. You can also deposit leftover funds from any completed projects for an extra financial safeguard.
#4 Working with Friends
Starting a business with friends can be tempting. Who wouldn’t want to spend the workday with their closest pals? Unfortunately, choosing friendship over business can be detrimental to your company’s success.
This isn’t to say that friends can never work as business partners (and vice versa). However, it is important to understand the difference between the two. When entering an entrepreneurial partnership, you want to choose someone you work well with. Oftentimes, close friendship does not equal compatibility in the professional landscape.
Understand that comradery and work can coexist, but this relationship requires clear boundaries. If you’re thinking of going into business with a friend, make sure you’re capable of working together. Try conducting a trial run of your plan before making any major investments.
If you’re looking to find a new partner, use a networking app like Bumble Bizz to meet other business-savvy individuals.
Make Business-Centric Decisions
Starting a new business venture must be done carefully. You want to weigh all your options each time you’re faced with a financial decision and avoid rushing into anything too quickly.
Remember to take time and be patient, no matter your ambitions. Rome wasn’t built in a day, and neither is a thriving business. Success is obviously the main goal, but it can’t be reached if careless mistakes continue to set you back.
Use your best judgment, surround yourself with helpful team members, and don’t be afraid of failure. You’ve got this!