- On August 10, 2020
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Most mistakes that commonly take down businesses or startups are avoidable. It is rightly said that knowing how not to fail is success. Starting a new business venture is exciting and the thought of the future-returns and the freedom that comes with being your own boss is enough fuel to pull you through.
Nevertheless, don’t get caught up in this euphoria, in such a way that it makes you skip over important steps in the first few months that are critical to ensuring the bright future ahead for your business.
In this article, we will look at the top 3 startup missteps early-stage businesses make that you can avoid.
Misstep 1: Not Separating Yourself From Your Business
As you kick-start your business, it’s temptingly convenient to save time and money by using your personal bank account and credit cards, after all, if you don’t take it personally, who will? But the earlier you separate your business from yourself the safer and more secured the future of your business is.
This will help you effectively and efficiently track your cash flow and measure performance. It will also save you from bearing the consequences of your business personally—you’re not your business!
Solution: Create a Limited Liability Company or form a corporation so that liability associated with the business is treated separately from you and of course, register your business. Also, ensure to have a separate bank account for your business, this will not only help you track cash flow but also allow you some other benefits such as access to funds/loans.
Misstep 2: Going Public When You’re Not Ready
Yes! You have a great idea, maybe you’ve even tested it once and it worked. But is that all it takes to be ready for the public? A lot of startups confuse launch dates for start date, most successful businesses started a long time before they ever launched.
You must ensure that in all possible scenarios, that whatever offering you give meets the value proposition. The product or service doesn’t have to be perfect, after all, no product is ever perfectly finished otherwise there won’t be new improved versions or updates. However, let your brand fulfil its promise before you go public.
Solution: Ensure that you have tested and tried your product or service under multiple, even worst case scenarios. If it works, then fine! If you’re going public, be sure your test-group is well satisfied. Otherwise, strive to satisfy your test group until your brand meets its value proposition.
Misstep 3: Not Reading Between The Lines
It is often said that the devil is in the details. When was the last time you read through the terms and conditions of your social media, during software installation or in choosing a subscription plan? Especially for very prosy detailed contracts/agreements, most businesses just sign off agreements believing in good faith that all that was said was what was written.
There are several instances where businesses signed off sizeable ownership of the business without knowing, in one of such agreements, the software developer retained the rights to the source code and had to charge an additional sizeable payment for the business to obtain its own source code. For the fear of such cases, some businesses would rather seal deals over handshake which is never good for any business either.
Solution: Keep agreements precise and simple and endeavor to read through and understand every detail—give no room for assumptions.
It is good to take a leap of faith, however, don’t forget to look before you leap. Building a successful business is very possible and less stressful when you take proactive steps to avoid these and many other common startup mistakes. Set clear policies for your vendors, employees, and contractors.
Having security in your business premises is a cakewalk, however, your Intellectual Property (IP) needs to be well secured. Experience is the best teacher even in business, but no one said it has to be your personal experience, learn from others mistakes. Better days await you!