Setting up a new business venture is fraught with risk; even the most experienced entrepreneur can come up against obstacles that seem impossible to overcome. In this short article, we point out a few classic mistakes to avoid when creating a business from scratch.
- Lack of planning – This is actually quite a common mistake; an entrepreneur can be so focused on success that they fail to take everything into consideration and that can lead to failure. You need to compile a comprehensive business plan that covers every aspect of the business and this plan should be able to stand up to some heavy scrutiny. Find a local provider of small business accounting in South West Sydney and let them set up a bookkeeping system that you can follow.
- Lack of funding – It is easy to be an optimist and think that come what may, everything will slot into place when in reality, there are serious issues that need to be overcome. All it takes is a few unpaid invoices and you will run out of cash; the smart thing to do is create an emergency fund that can be used to support the business throughout the first year. Don’t think for one minute that you will not encounter unexpected costs, as you most certainly will.
- Poor management – You might be very creative but do not have good communication skills, in which case, it will be hard to manage your workforce. Knowing your strengths and weaknesses is important and if you don’t have managerial experience, bring someone in who does. If a small business lacks direction, it makes it much harder to thrive, as employees will be looking for direction. Here are a few tips to increase brand awareness.
- Hiring unsuitable people – A common mistake is to hire the first candidates that respond to your ads; rather you need to screen each applicant carefully and make sure they have the right mindset and attitude. This can be more important than the actual business experience, as people can be trained to acquire specific skill sets, but a bad attitude can spread and lower team morale.
- Expanding too fast – If business is brisk from day one, you might think to expand your operation, when in fact, that initial surge is due to people you know wanting to help you get off the ground. It is easy to get caught up in a whirlwind of success and that might not last, so do be careful about growth and wait until you are sure that the business needs extra resources.
If you write a comprehensive business plan that takes everything into account, this should stand you in good stead and with hard work and a level of commitment, the business will carve out a market share. Some sectors can apply for a government grant to support the business in the early days, so do check to see if you qualify.