These days, it’s easier than ever to launch your own business. Thanks to the internet, you don’t need a lot of investment capital to get started, or even a physical office. With an online connection and a good idea, you can be on your way to success in no time.
Of course, being an entrepreneur does have its challenges. If this is your first time running a business, you’re bound to find yourself running into a few stumbling blocks along the way.
It’s how you respond to these challenges that determines whether your new venture will be a
money-making goldmine or just another flop.
Today, we’re going to introduce you to some of the most common mistakes first-time entrepreneurs make, so you can do your best to avoid them.
1. Not Knowing How to Handle Finances
First-time entrepreneurs often get carried away with the exciting parts of running a business. Designing products, investing in marketing campaigns, and creating logos are all a lot of fun.
However, you'll also need to handle more administrative tasks, such as hiring, firing, and cash management.
If you don't know much about things like taxes and VAT, start working with a professional accountant straight away who can handle those headaches for you.
However, you still need to learn the basics of financial management for yourself. Make sure you’re comfortable creating invoices and following up on payments. Have a good idea of how much you need to earn each month to break even, and what it takes to turn a profit.
2. Hiring Your Friends
When you launch your own business, and you're looking for people to help you run it, you might think that the best option is to simply hire your friends. After all, the people you love are dedicated to seeing you succeed, you love spending time with them, and it's a great feeling to help them achieve their goals.
Unfortunately, hiring your friends is often a bad idea.
When you hire based on your existing relationship with someone, rather than searching for the skills you actually need, you end up losing out. You'll usually have to hire someone to pick up your friend's slack, which means more money coming out of your pocket.
Additionally, if your friends can't live up to expectations, or your business struggles to make money, your relationships could end up in some serious hot water.
3. Doing Everything On Your Own
Just because you shouldn't be hiring your friends doesn't mean you have to run your venture solo. Initially, it can feel like a good idea to keep your business as a one-man band. After all, if you do everything yourself, you don't have to worry about wages and labor expenses.
Unfortunately, if you're working in your business, you can't work on it too.
There are going to be times when you need to delegate tasks to people who will be more efficient at them than you. This could mean that you hire an SEO team to improve your online presence and attract more customers. Or perhaps you'll hire an accountant to handle your regular tax returns.
Even if you did have the skills required to do everything on your own, your productivity and creativity would suffer.
Proper time management will be of essence for running your business. Effectively managing y our time and tasks means knowing when you need to leverage outside help, so you can focus on the things you do best.
4. Thinking You Know Everything
Just because you came up with the idea for your business doesn’t mean you know everything there is to know about running it. Pretending that you have all the answers isn’t the sign of a good entrepreneur.
Instead, you should constantly be looking for learning and improvement opportunities. Admit it when you aren’t good at something and look for ways to upgrade your skills in those important areas.
A good way to make sure that you keep your feet on the ground and your head in learning mode is to develop a good network. Find people that you can follow on social media or speak to regularly about the challenges of running a business.
Not only will you learn something, but you’ll feel less isolated too. Remember, running a company can feel lonely sometimes.
5. Giving Away Control for Capital
Finally, one of the most common mistakes new entrepreneurs make is giving away control over their company to investors.
While it's important to ensure that you have enough money to get your venture off the ground, you still need to make sure that you're in control of its mission and future. Before you look for an investor, focus on bootstrapping your business for a while.
If you can start with bootstrapping and gain some traction, you'll be able to attract investors that are interested in your vision, rather than just getting control over your company.
You'd be surprised how many entrepreneurs get kicked out of their own business because they give away too much control.
Ready to get started?
Becoming an entrepreneur is a challenging process, but it's also a very exciting one. Once you know which beginner mistakes to watch out for, you'll be able to navigate your pathway into your new life with more confidence.
Good luck starting your new business the right way!
Michelle Laurey works as a VA for small businesses. She loves talking business, and productivity, and share her experience with others. Outside her keyboard, she spends time with her Kindle library or binge-watching Billions. Her superpower? Vinyasa flow! Talk to her on Twitter @michelle_laurey.