11 Mistakes to Avoid When Starting Up a Business

3. Slow decision-making

You want to make sure your business is highly adaptable to technologies, trends and feedback and can take decisions quickly. A common mistake made by small businesses is that the length of time it takes to make a decision is just too long, and that by the time a decision is made, things have moved on.

There are a number of decisions that must be made quickly, such as which investors to go with, which customers to focus on, decisions of which suppliers to go with, and so on. From a marketing perspective, procrastinating over marketing ploys can mean that the user you have targeted has moved on, or will respond to a slightly different approach than the one that was originally earmarked. Things move incredibly quickly, so you must make decisions which respect this evolving environment.

4. Hiring in a rush

Hiring the wrong candidates is one of those common mistakes you want to avoid in your entrepreneurship journey. Many new small business owners love the idea of getting someone on board to share the burden, which is the right approach (as the point below on micromanagement will emphasize), but another crucial mistake to avoid is hiring before the business is ready. This will lead to two difficulties:

1) The business may not yet be quipped to pay the wages of another person, and even if it is at the moment, that may take away vital capital that may have been better utilized elsewhere in the business. Very often a new business will have a finite length of life it its current form, so maximizing resources in that period of time is the priority.

2) A second issue is that in your rush to recruit you may end up bringing the wrong kind of person or the wrong skillset on board. Give yourself time to understand the character and expertise that the business requires, and then hire based on those principles, not on who it is that you would like to work with (which is important too, but should take a backseat in comparison to those other elements).

5. Not using contracts

There are many proven ways entrepreneurs can stop sabotaging their business growth and protecting themselves is one of them. The history of business is littered with tales of relationships that broke down as soon as a little success was achieved.

By no means should you expect this to happen to your business, but the lesson to be learned here is that contracts need to be used, even in the early days of a business, in order to establish ground rules. It’s all well and good saying that contracts are unnecessary because you are a group of friends working together (as opposed to colleagues) but a business venture requires the rules of business to be adhered to, and respected.

6. Working for free

As the founder of a startup, considering what to pay yourself is a difficult decision to make. Indeed, deciding on the remuneration of employees can be a whole lot easier than settling on a package for yourself – if indeed you decide on anything at all. Following on from the last point, the rules of business do need to be adhered to a certain extent, and that means that you simply cannot afford to work for free (how will you survive?) but it then also doesn’t reflect accurately on the cost of the business.

At the end of the month, you need to pay the bills. So, don’t work for free. If you’re good at something, you should be paid for it. As an entrepreneur or business owner, you want to achieve financial stability.

Similarly, don’t pay yourself too much either, as that money will probably be better utilized within the business. It’s a minefield making these types of decisions, so seek respected advice and perhaps use a model whereby your salary is connected to the money that you are bringing in.

7. Failing to pay attention to the competition (or getting obsessed)

As an astute startup founder, you can learn a lot from your competitors. Indeed, you don’t need to reinvent the wheel and can utilize a lot of the approaches that your competitors use in terms of product delivery and marketing (but it is also important to establish your own voice too). When competitors innovate, you need to be on the ball to react, and so keeping a close eye on the competition just makes smart business sense.

At the same time, don’t let it lead to an obsession. Yes, it’s important to understand how your competitors go about things, but at the same time, you must be your own entity with your own ideas and obsessing over what your competitors are doing can be an awful waste of energy.

8. Micromanaging

As the boss, much is expected of you (not least by yourself). However, a typical trap that startup founders fall into is that they micromanage every aspect of the business, which becomes unsustainable. Micromanagement is the curse of the small business owner

Delegation of tasks is highly recommended for startup founders, entrepreneurs or new business owners. That of course means surrounding yourself with the right people, but then trusting them when you have them on board., and effectively strangles the life out of both the individual and the business. Utilize the skill and creativity that is at your disposal in the form of talented people – they will give the company fresh impetus.

10. Not understanding your customer base

One of the first activities to complete when starting a business is the identification of your target audience. This will involve drawing up a detailed profile of a typical user, which will then help you pinpoint every element of your approach.

Not only does having a user profile assist in marketing practices (from the type of campaign you formulate to which channel of social media you exploit) it should also be instrumental in product/service design and delivery. Everything you do should be geared toward your typical user, so you do not deliver the product or service that you want to deliver or deliver the product or service that is required by your target market.