Starting a new venture means riding an adrenaline high with sticky notes littered across your office and feeling the immense pressure of a thousand decisions waiting to be made. Whether you know you can provide a service to solve a problem or a product people in Fort Worth are itching to purchase, it can be easy to let excitement take the wheel.
For most business owners, there is a lot of passion and not a lot of internal “stuff” happening when they first start out. This lack of infrastructure can cause many entrepreneurs to fall victim to simple business mistakes they could’ve easily avoided. Starting your own business is scary enough, so why risk adding preventable stress and monetary setbacks?
Learn From Others’ Common Business Mistakes
Every entrepreneur will face speed bumps along the road to success, but the most impactful mistakes in business are the ones you can prevent before day one. It’s easy to obsess over graphics and social media while your business is new, but don’t forget about the behind-the-scenes work that allows a company to stand tall.
When your backend is a mess, it creates more anxiety and feelings of inadequacy. Imagine walking into your own business every day knowing your systems are slapped together by coffee runs and hopeful prayers. Educating yourself on the following mistakes can help you pivot from building a job for yourself to building your business legacy.
Skipping The Strategic Planning Process
Every successful venture has one thing in common: a documented plan of action. You may think you have your ducks in a row, but if it’s not down on paper, it’s not a plan — it’s a hope. Having a strategic plan for your business allows you to refer back when times are tough. Without a plan, you are likely operating solely on “gut instincts” and spending way more money than you should because no one has mapped out the financial projections.
Your plan should include detailed financial goals and marketing initiatives, but also an operational breakdown of your business. It forces you to look at your ideal market and find the roadblocks before you hit them. If you’re an artist or provide a service, this is where you can define your “scope” of work and prevent issues with clients that want more than you’re giving.
Poor Accounting Procedures and Cash Flow Management
Cash is king when running a startup, but poor bookkeeping is at the top of the list for most dreaded mistakes in business. You open up a bank account for your business and suddenly it’s an ATM, or you’re so overwhelmed you don’t record your expenses until April rolls around. Bad bookkeeping looks like drowning in receipts and being scared of the IRS.
There are simple things you can do from day one to ensure your money grows. First, never mix personal purchases with your business account. This may sound silly, but it’s easy to slip into this habit when you’re a one-person shop. Next, invest in a good bookkeeping software that allows you to track your sales, expenses, payroll, and more. If numbers aren’t your thing, hire someone who does!
Perform a Financial Health Check
- Do you have a dedicated business bank account?
- Are you putting away a percentage of every transaction for taxes?
- Do you know your exact profit margin on your core product or service?
- Could you print an accurate Profit and Loss Statement today?
If you answered No to more than two of the above questions, now is the time to level up your books. There are tons of free and low-cost bookkeeping solutions that can help you watch your business flourish from a financial standpoint.
Trying To Do It All Yourself
Way too many entrepreneurs try to juggle way too many jobs during the startup phase. Don’t get me wrong, I spent way too much money hiring other people to do things I could do myself when I first started. However, once you hit that revenue plateau, you will realize you simply can’t scale without delegating.
You have to be ok with handing things off to others if you want to build a legacy. Whether that’s hiring a bookkeeper to take the load off, or outsourcing your monthly billing to a virtual assistant. Don’t be afraid to ask for help if you want to stop making simple mistakes. Your business will only be as big as you allow it to be.
Failing to Adapt to the Changing Market
Times are changing, and like a cellphone walking around on WiFi from the 90’s, your methods need to evolve, or you’ll be left behind. Failure to implement new business practices is something entrepreneurs should avoid at all costs. From manual data entry when you have access to automation, to not training your team on your systems. Stagnation is the number one killer of dreams.
If your business can’t operate without you showing up to the physical location every day… It’s not a business, it’s a stress-fueled job. Never be afraid to look at current processes and ask yourself, “Is there a better way?”
Neglecting Detailed Market Research
Before you take your life savings and open up that boutique shop or large manufacturing facility in Fort Worth, take the time to learn who you’ll be selling to and what they’re willing to pay. A lot of startup business mistakes come from thinking that because you love your idea, everyone will too. By not researching your desired market, you’ll be left with high overhead costs and little to no profit.
Look at your competition around Fort Worth and see what they’re missing. Are there complaints about current providers not offering XYZ? Find gaps in content and services your ideal clients are searching for and fill them.
Not Having Signed Contracts
I get it, you started working with friends or your first two clients never tried to milk you for more. When running your own business, never underestimate the power of a signed contract. Contracts are there for a reason, and like that friend who never returned your favorite shirt… some people won’t listen until they’ve gone too far.
If you don’t have a legal agreement in place, you can pretty much kiss your money goodbye if things go south. Bottom line, having signed contracts is a basic foundational aspect to professionalize your backend. Get your agreements in place with every client BEFORE you start working.
Choosing the Wrong Business Structure
“I should probably do something about that…” is what you hear from so many aspiring entrepreneurs about their business structure. Filing as an LLC vs. a corporation vs. a sole proprietor has massive tax and legal implications. A lot of new business owners miss this step or go “legal” with their venture and never look back.
By not knowing how you’re taxed or what annual filings you need, you’re asking for an IRS penalty. Each business structure allows you to be taxed differently, and some vs. others can expose your personal assets.
Havins Business Services | Your Start-to-Launch Partner
Here at Havins Business Services, we understand how difficult it can be to focus on your business bucket list while running a business. Not only do you have to create your vision from scratch, but you also have to execute day-to-day tasks that layer on top of your goals. We strive to be that missing link between your big-picture goals and your operations team on the ground. Whether you’re a stressed-out one-person shop looking for some relief or a seasoned business owner who knows it’s time to grow your internal capacity, Havins Business Services is a local business consultant that can provide financial expertise and “fix-it” problem-solving to help you move your business forward.
Let us help you build your internal capacity so your dream business can run without you someday. Everything from operational due diligence to full-service bookkeeping and strategic tax planning. We want to be your go-to advisor when you need guidance or a second opinion on your business ventures. Schedule your consultation today to learn how we can help you transition from stress to success.