Over the next couple of weeks we are going to look at common mistakes that people make when starting a new business. In this article we explore mistakes that are made in the planning stages. In the next article we will look at mistakes often made in the early days of a new business.
These mistakes can result in a failed business, or they can mean you take longer to reach profitability. In either case it is better to avoid them. Here are eight mistakes that you should avoid when planning to start a new business:
- Blindly Believing
The vast majority of businesses do not become successful on belief alone. A sound business plan is also needed, which means you will more than likely need to create one for your business. Where this becomes a problem is when you substitute belief for your business plan, or ignore what the business plan says because it doesn’t match with what you believe.
- Planning Too Much
Notwithstanding the comments made in the previous point, it is possible to plan too much. This is when you get bogged down in the details of the planning stage to the point where the business start date never arrives. One of the reasons for this is fear – planning the jump is not as scary as actually taking the plunge. You can’t make profit when planning, though.
- Taking Big Gamble’s With Your Family’s Money
Family members can be a financial lifeline when starting a new business. The same applies to your own savings account. You should, however, treat financial resources like these with extreme caution. For example, you probably shouldn’t risk all of your aunt’s life savings on your business idea because if it doesn’t work, she will have nothing.
- Listening To Customers (too much)
Of course every business has to listen to its customers. There are occasions, though, when doing what your customers say or ask begins to make no business sense. Just because they say something now doesn’t mean they will hand over the cash when the time comes. In addition your customers are not thinking about the long term viability of your business. So, listen to your customers, but make decisions for your business.
- Ignoring Criticism
It is always hard hearing that you are doing something wrong, particularly when you feel passionately about it. Ignoring criticism from experienced and reputable sources, however, doesn’t help anyone.
- Thinking It Will Happen Quickly
Almost all business take longer to become successful than was planned or hoped for at launch stage. You should therefore build this into your thinking right from the beginning. Start with being realistic with your timelines, and then build in some contingency options if they are not met.
- Thinking Personal Experience Equals Business Expertise
Just because you are good at something on a personal level, or are passionate about something, doesn’t mean you can turn that into a successful business. You might be a good cook, for example, but that doesn’t mean you can be a chef, and it certainly doesn’t mean you can automatically be a restaurateur. You should not be put off by this point, though. Instead accept its reality and take action to mitigate it, like bringing in expertise to make up the gap, or doing training courses to improve the skills you lack.
- Waiting For The Perfect Time
Finally, many people fail simply because they never start. Often this is because they are waiting for the perfect time. There is rarely a perfect time, however, so the best advice is to do your research, prepare a business plan, test your model, secure the funding, and then go for it.
For more advice on starting or running a business contact one of the team at Gilroy Gannon today.