All entrepreneurs make mistakes. When starting a new business, it’s easy to get caught up in the enthusiasm of the venture and not give the due care and attention to factors that will be critical for the long-term success of your business. Here are the top three common pitfalls that business owners face in those early days and tips on how to deal with them…
Get the right team around you – from the external people you bring in such as accountants and solicitors to the staff you employ, getting the wrong people onboard can be a costly error that will not only drain your income, but also damage morale. Take time to choose the right people. People that share your vision, care about the outcomes and who have the desire to do well. Rushing into recruiting is definitely something you should avoid.
Get the pricing right – whether you’re selling a service or a product, then do your research before setting your price. So many business owners, especially those in service-related roles, price their services too cheaply in the beginning simply to get the business. This is a fundamental error. Once you’ve priced your service too cheaply it can be virtually impossible to raise your rates to the level that they should be. Always do your homework, see how your competitors are pricing and get some advice if you need to, before you make the kind of mistake that’s difficult to rectify.
Skimping on your marketing – money is often tight when starting a business and many business owners make the mistake of skimping on their marketing to save money. This is a classic mistake.
At the beginning of your business you should aim to use somewhere between 10 to 20% of your targeted gross revenue for marketing. As you become more established you can potentially take this down to somewhere between 5 and 10% with many of the bigger businesses typically allocating 5% or a bit less to their marketing budget.
You need to hit the ground running when you start a business so having good branding, a website that people can navigate and a marketing strategy to attract new business is absolutely imperative. Skimping on this is a mistake that you can’t afford to make.