There are countless decisions to make in starting a business, and any one of them can hurt or help the success of a startup. However, it will likely be a mixed bag where some decisions will help ensure success, while others will be a hit that can set the endeavor back.
There is no fool-proof way beyond hindsight that determines which decisions are good ones and which ones are bad, but startup experts cite these as lethal mistakes that can lead to significant mishaps.
- No planning phase: It is best to do some market research and then come up with a business plan based on what the research says.
- Not having SMART goals: Specific, measurable, attainable, relevant, and time-based (SMART) goals help businesses attain objectives and build on those successes.
- Undervaluing your services or products: This is often due to a lack of confidence or fear of failure, but founders need to believe that the business truly offers something of value. Identify a good price entry point and go with it until the market says it is not working.
- Not using new technology: Bugs and glitches can punish early adopters, but often there are opportunities for a new business to put space between itself and its competitors. It is also smart to adopt new technology before habits set in, and retraining is needed.
- Avoiding marketing: Marketing comes in many forms, but its essential purpose is to get the word out there about a new product or service. It is a mistake to assume that customers and their business will bust down the door.
- Not knowing the customer base: Founders and employees must understand who the business serves and where to find those customers.
- Spending too much: Expenses are unavoidable but avoid the temptation to accumulate too much overhead. Create a sustainable budget and stick to it.
- Not spending enough: Starting a business is hard enough, underfunding it does not give it a chance to grow, mainly when there are areas of opportunity or signs of growth.
- Doing everything: It can be hard for some owners to delegate, but it is better to build a good team that allows the owner to focus on the unique activities they do to drive the company’s success.
Owners need a team
No one goes it alone, so business owners will often need to organically add staff, work with a partner or investor and have a reliable team of vendors. A business law attorney can often be a real asset in helping with contracts, business structure and a wealth of advice based on years of working with other clients.