It’s an unfortunate statistic that most companies fail within the first twelve months. Although this is a disheartening figure, there’s plenty you can learn from it. In fact, we can all learn from the mistakes of the past, and this is no different. Most of us tend to look at the success stories for inspiration. And that’s great. But, you’ll learn just as much by studying the failures. What did they do wrong, and how can you make sure you don’t do the same? Let’s take a look at the five most common mistakes in business.
- Going it alone
There is no one person who possesses every single skill necessary for business. A good company need a well-rounded set of qualities. You need a careful balance of creativity and logic. You need someone who can go out and sell the business, and you need someone who can focus on the product. That’s why the best businesses on the planet have a strong partnership or core team at the helm. If you’ve got a great business idea, don’t go it alone, find the right people to help.
You’d be forgiven for thinking that perfectionism is the key to success. In actual fact, perfectionism will just slow you down in the early days. It might even kill the business. Perfectionism, we agree, is a great quality if you’ve got the luxury of time and money. Unfortunately, no small business has that luxury! Endlessly perfecting every small part of the business will lead to slow growth. Instead, what’s important is getting something on the market. Enough tinkering, just do it!
- Launching too early
Of course, there’s a fine balance to be struck. You don’t want to spend too long planning and wasting time. But, equally, you don’t want to launch too early. A certain amount of planning is essential. Take the time to write a solid business plan, and research your product and audience. Create the right environment for your launch, and build up a buzz. Launching too early can leave you with a long uphill battle.
- Getting the basic foundations wrong
You might not know this, but there’s a lot that needs to happen under the surface. For a business to function effectively, you need to take care of all the admin. Everything from the company formation to your intellectual property ought to be sorted out early. Take the time to ensure your business is watertight, Make sure there is a strategy in place. The firmer you build the foundations, the stronger the business will be.
- Money mismanagement
At the end of the day, good business all comes down to money. Can you manage the balance sheet effectively and efficiently? The bottom line of business is quite simple. Are you bringing in more money than you’re spending? At the same time, you need to choose the right areas to spend money. A good company reinvests a huge portion of its income.
Avoid these pitfalls, and you’ll keep your business doors open for longer!