You are excited that you have just started a business and looking forward to handsome returns. However, before you get comfortable, there are a few things you need to know. Here are possible mistakes that many people make as they start a business:
It’s normal to be proud about your new investment. However, too much enthusiasm might just land you into trouble. Try to tame your anxiety because if you don’t, it might lead you into financial ruin.
- Being over-ambitious.
Ambition is good. In fact, many young people are ambitious. Obviously, in order to achieve anything, you must be ambitious. However, don’t try to achieve everything within a very short time. Business is not a joke. This is something you must build in stages. Your business has to grow slowly by slowly into the future. If you hurry, you might just break. Never grab more than you can bite. Don’t try to over-invest with the hope of higher returns. You might just reach a point when you will discover that things are not working out as you expected. This might lead you into frustrations and mental torture..
There is this good friend of mine that quit her job as a doctor and started a hotel. This was a smart move (according to her). I quickly remembered what a clever friend of mine once told me, “only fools quit their jobs. A clever guy keeps up to five jobs and finds time to manage all of them!”. I quickly thought that Joy had made a terrible mistake, but as you know, it’s difficult to argue with ladies. So Joy opened up a big hotel business and started off in high spirits. Three months later and Joy discovered that business is not easy. Joy gave up before she started. Currently, she is trying her hands on wedding cakes. The question is, was it a smart move to quit her job as a doctor and join the business world? This is exactly the first thing that comes into every young person’s mind immediately they lay their hands on substantial amount of cash tat can enable them startup a business. Please note that things can really get tough and you might wish you never resigned from your job.
The smartest thing Joy would have done would have been to employ a manager to manage the business while she monitors its progress. If it picks up well, then she would have every right to resign and go full swing into business.
- Surprising your family
Everybody loves surprises, but not like this one. When you start a business, don’t expect returns to start flowing in immediately. It will definitely take some time. Your family is used to certain privileges and luxuries that might soon disappear before you find your ground. What do you think will happen when you announce suddenly that they will have to do without certain ingredients in their menu?
Being in business might also require you to sacrifice some family time for the sake of the business at hand. You don’t want to deal with the repercussions of what might happen if you suddenly became scarce at home. The worst could be when your partner decides to cheat on you because you are “too busy”. To avoid such heart-aches, please prepare your family psychologically to deal with the challenges that might arise because of starting a new business enterprise. Let them understand the sacrifices they will have to make in order for you to succeed as a family. Don’t surprise them.
- Lack of proper book-keeping
Any successful businessman will definitely tell you that success lies in proper book keeping. You must maintain proper records of inflows and outflows, income and expenses, profits and losses. If you don’t maintain clean records of all your monies, you might discover that you have gone deeper into your pocket and are running on losses. It is therefore necessary that you record every single expense you encounter.
- Wrong Bank Account
One grave mistake you wanna do is to mix up your business monies with your family savings. Failure to open a separate account for your business will give rise to confusion and conflicts. You will have difficulties to monitor your cash flows. There are high chances that you will spend into your family or personal savings and sooner than later, you will encounter problems with your family over unexplained expenses. To avoid all this, open a new account for your new business enterprise.
- Giving out free goods
How many times have you ever gone back to purchase goods that you received as free samples from salesmen? One common mistake that businessmen make is to imagine that giving out free samples is a marketing strategy that will suddenly boost sales.
Of course this could be one of the marketing strategies but it might or might not work for you. Did you know that giving out free samples only succeeds in biting into your profits? The best approach to introduce your product into the market would be to sell that new shoe, dress or electronic gadget cheaply rather than give it out for free! It’s common for people to receive free goods and never come back to buy it again. Rather than incur losses this way, simply cut your profits margin and sell it cheap.
- Lack of a business plan
One grave mistake you can ever do is to start a project without short and long term plans of what you intend to achieve within a specified period of time. The best you can do is to start off with clear objectives of what you wanna achieve. You must have SMART goals well stipulated in print and with clear strategies that will enable you achieve them.
- Forgetting your buddies
The first thing that the majority of people are tempted to do when they establish their own business enterprises is to disrespect their bosses and colleagues. You suddenly develop confidence and a sudden feeling of superiority and chances of despising people are high. Remember that your business is just an extension of your office space and you must maintain professionalism at this space just like it was when you were employed. If you have to resign, please leave your job with dignity and respect. Don’t disagree with your boss or forget your friends just because you found something else to do. Such people played a significant role in supporting you to where you have reached. Don’t also forget that things might not work out in the business landscape as you had expected and you might actually want to come back.
- Neglecting Legal issues
Before you decide on a business name, please make sure you do a thorough research to find out if the name is taken. You can do this with the registrar of businesses within your state to find out if the name you have decided on is being used as a trademark by another business enterprise. You should also expand your search countrywide. This is important because if by any chance you use somebody else’s trademark, you might be sued. This will be hazardous because fighting legal battles is costly and time consuming. If you start off this way, believe me, you will hate business forever.