When starting a new business, there are some mistakes entrepreneurs make that ruin all their efforts, some of which can substantially worsen the risk of failure in their business. To increase your chances of success in setting up a business, you must therefore avoid as many mistakes as possible.
In this article, I will tackle 9 mistakes that you should absolutely avoid when setting up your business:
Mistake No. 1: Not Consulting With Loved Ones Before Setting Up A Business:
As weird as that may sound, a business creator must not neglect the impact and the role of those around him in his project. The support of family and close friends is a big plus.
Starting a business is an adventure which requires a lot of personal investment and probably encouragement from close relatives. In tough times, which you may go through, you need to be able to find comfort in those close to you.
It is necessary for entrepreneurs to be able to count on the support of their relatives within the framework of their business. In addition, they will naturally listen to you and will not hesitate to help you if they feel the need.
Finally, a relative’s point of view on the project is always interesting, given that he takes the situation seriously and offers an outside perspective.
Mistake No. 2: Starting A Business Without Having Prepared Your Project:
Starting a business requires preparatory work, which often lasts several months.
To maximize your chances of success, you need to take it seriously. During this phase, you will have to make choices, and determine very important elements:
What are your skills, and what are your desires?
What are your personal constraints?
What is your project, and what would you like to build?
What are your objectives through your project, both personally and at company level?
What exactly is your strategy?
What is the economic model of your company?
What is your action plan to launch your project?
These questions require thought, and the project preparation phase is where you can answer them.
At the end of this process, you will be able to assess the feasibility of your project. So, take the time to prepare enough for your business creation to increase your chances of success.
Mistake No. 3: Not Taking The Time To Test Your Offer:
Before investing too heavily in your project, you must make sure that your ideas are interesting: Does your product or service generate value in the eyes of your customers? Are they convinced? For this, you can perform tests. Then, several scenarios are possible:
The offer is appreciated by customers who have tested it, which is therefore positive because it should, in principle, be of interest to your target customers.
The reaction of customers who have tested your product or service is mixed: as it is, you will have a hard time competing with your best competitors.
So, you need to improve your offer by using customer reviews.
The offer does not appeal to customers who have tested it. In this situation, you should consider modifying your project more profoundly, or even stopping it in the absence of solutions.
Ideally, the tests should be done fairly quickly (using MVP, for example).
This saves you the trouble of continuing to perfect a product or service that ultimately will not interest your future customers. In addition, by collecting reviews regularly, you will be able to improve your offer by iteration.
Mistake No. 4: Starting A Business Without Doing Market Research:
This is a mistake that can have serious consequences, because the results of your market research are paramount, and they are the source of many important decisions.
Without market research, you will not have any analysis of your business environment (state of the market, prospects, competition, customers, suppliers, regulations, etc.).
You will not be able to work effectively on the positioning of your offer, to differentiate yourself from competitors and to gain an advantage over them; you will not be able to study the economic viability of your project.
During the first stages of your project, you must therefore precisely identify your market and your target audience, then study them in depth.
Mistake No 5: Building A Business Model Without Thinking About Customers:
Your business model is about explaining how your business will create value and generate income. A business model is only good when it is customer-centric first. To build it, it is essential that you place it at the center of your approach:
Who is he?
What is the use of your product or service to him?
Why should he choose your product or service over that of the competition?
The offer must create value for your customers, who are the source of your income. Without customers, there is no turnover. A product that only pleases you is totally useless.
Mistake No. 6: Not Surrounding Yourself With Partners To Build Your Project:
The isolation of the entrepreneur is a mistake that must be avoided when starting a business. To build your project, you must surround yourself with:
A small community of potential customers; to test your products and obtain constructive criticism,
Your loved ones; to get support when you have doubts, as well as a neutral and external point of view on your project, competent professionals who will advise you and contribute to the construction of your project.
The business creator must know how to surround himself with several stakeholders.
Mistake No. 7: Being Persistent In Wanting To Do Everything Yourself:
Starting a business is complicated to manage entirely yourself for several reasons:
You need to have multiple skills, in a wide variety of fields, you need to have enough time to do everything, and you need to know how to take only excellent decisions without outside advice.
Suffice to say that in practice, it is extremely complicated to manage a business creation project on your own.
To be effective in your approach, you must know how to distinguish what you can do yourself and what you will have to delegate. Prioritize the essential elements of your activity and do not hesitate to delegate what is secondary or what you do not know how to do.
Mistake No. 8: Getting Started Without Having Made A Financial Forecast:
The forecast study offers valuable information to the business creator.
In particular, it makes it possible to measure the profitability of its project, to check that the company has the means to pay it sufficient income, to anticipate possible cash flow problems.
Of course, we are fully aware that the figures which appear in your forecast will be false. Indeed, no business creator is able to predict what will be his real figures, that is to say, those which will appear in his accounts.
However, you may be able to determine a few scenarios that are fairly close to reality. Then, the use of a dashboard will allow you to update the forecast to adapt it to reality. Also, knowledge of certain indicators, such as the breakeven point, are important for managing the business.
A forecast study can be carried out very quickly, without having to build dozens of financial tables. In the context of a relatively simple activity, an income statement and a cash budget are largely sufficient.
Mistake No. 9: Starting A Business Without Having Worked On Communication:
To give visibility to your new business, and attract your first customers, you will necessarily need to communicate. There are many channels to use: your own network, a website, a blog, social networks, advertising etc…
As much as possible, you should prepare your communication before launching your activity in order to quickly register cash inflows.
Here, the degree of importance of this work depends strongly on the nature of your activity. For example, if you are starting a business on the internet, it is essential because some levers can take months to produce effects (such as SEO).