Starting a business: 11 common mistakes to avoid
Starting a business takes serious effort. To make sound decisions, avoid feeling discouraged and give your business the best chance of taking flight, you need to approach things with a level head. The road to success may be littered with challenges and pitfalls, but hopefully our tips can help you sidestep some of the most common!
Before you get started
1. Believing that being an entrepreneur is easy
Running a business may be exciting, but it also involves a tremendous amount of work. Getting a business off the ground and turning a profit is something that takes time and dedication that extend well past a typical 9-to-5 day. Success comes at a price, both literally and figuratively.
2. Assuming that profitability will come quickly and easily
Don't make the mistake of thinking that money will start to flow the moment you open your doors. It may take some time to start to actually turn a profit, and you won't be doing what's best for your business if you base your decisions on money alone. For your business to succeed, you need to feel motivated. You're more likely to keep that sense of motivation if what you're doing is meeting a real need or making a difference in your community.
3. Imitating a winning model
Just because a business model has been successful in the past doesn't mean it's right for you. What worked for one won't necessarily work for all. The important thing is that your business be in a field you know and love. Working on something that matters to you will boost your motivation and your business's longevity, too.
Start by taking some time to reflect and think about what's motivating you. Invest time and effort getting well-informed about your field, and don't hesitate to reach out to organizations that might be able to help you (local development centres, regional county municipalities, Community Futures Development Corporation, Business Development Centres, Evol, etc.). Pace yourself and remember: Slow and steady wins the race!
As you prepare your business plan
4. Failing to put together a plan
While the process may seem tedious and complicated, it’s important to prepare a proper business plan. Having a complete and well-thought-out plan allows you to see exactly where you're going and how you're going to get there. It also makes it easier to showcase your business to any potential financial backers. When properly done, a business plan shows how committed you are to your project and could open some doors for you.
5. Not getting involved in your business plan
It may be wise to have an experienced professional prepare your business plan, especially if you're putting off doing it out of fear or lack of knowledge. However, since you're the one who will be putting the plan into action, it should reflect your vision and your aspirations.
Before you start drafting your business plan, make sure you have a clear vision for your business. That will make the task much easier. You may find it helpful to read up on the topic or look at business models, but in the end there's really nothing better than having a clear overview. You may even want to take a step back and give your business plan time to breathe, or have a neutral party read it over to give you some perspective.
At the financing stage
6. Starting your business with no source of funds
It may be possible to start a business without laying out too much capital, but in the vast majority of cases you'll need to invest some of your own money to get it off the ground. This money doesn't just help you get things up and running, it also shows that you're serious and committed to the project, which is important when it comes to finding financing.
7. Waiting too long to get financing
Waiting until you have no more room to manoeuvre before asking a financial institution for a loan is a common mistake. It's important to keep an eye on your finances from the outset, so that you can reframe or revamp your plans if you have to—ideally before too much money has been invested. Don’t be afraid to question your thinking and to accept guidance and input from experts in the field.
8. Being overly optimistic
Be careful: You may need to reign in your enthusiasm! While it's perfectly normal to believe in your project and have high hopes for it, it's important to keep your emotions in check. If you're not thinking clearly, you may have unrealistic expectations. Try to focus on the facts and stay realistic! Creating a niche for yourself in the market takes time and you're bound to veer off course at some point.
You have many options when it comes to financing. Crowdfunding is actually a great way to gauge how the community will respond to your business idea!
9. Being overly confident
While being self-confident is a key to success, it's important to remain open to other people's opinions. You may be right a lot of the time, but anyone can make a mistake. Take the time to listen to what other people have to say: You've got nothing to lose and very possibly something to gain!
10. Refusing to trust others
It's vital that you learn to trust the people you work with. Everyone has something to contribute and can help shoulder the load. Plus, learning to delegate will help you keep from burning out.
11. Blindly trusting people
Be careful not to put your trust in the wrong people. Always be sure to ask questions, request references and question anything you're unsure of. An experienced person may very well have a different approach than you, but that doesn't necessarily mean it's better. When in doubt, trust your gut!
While opening up to others is essential, you should only do it within reason. Don’t entrust your business's well-being to just anyone! Take a step back and play devil's advocate before making important decisions. If you find yourself battling trust issues, you may find mentoring helpful.
Your Desjardins Business advisor may have just the answers you need! They're there to support you on your path to business ownership!