Given the rate of failure for startup companies, it goes without saying that this is just the tip of the iceberg in terms of problems new companies can experience. However, while this may not be a complete list, it is a good starting point to use as a “what not to do” when thinking of launching your new idea onto the business world.
Mistake #1: Entering An Area They Are Unqualified For
Let’s say that someone has heard that there is always a call for recruitment companies. It’s a profitable sector of society and there will always be a call for such kind of services. So, on the surface of it, that seems like a good business area to try and start a company.
However, it’s only a good area to launch a business into if you have an experience in recruitment. If you don’t, then you’re not only going to be trying to learn an entirely new industry, but you’re going to be doing it when your business aspirations and finances are on the line.
A surprising number of people throw themselves into a sector as they have heard it’s profitable, with no further thought beyond that. To truly make a business work, you need a background of experience in that area to call on.
Mistake #2: Knowing It All = Knowing Nothing
If you’re a doctor, you might think that you know all there is to know about opening your own surgery. On some levels, that’s entirely true – you’ve avoided mistake number one by entering a sector you actually have some experience in. Added to that, there’s no doubt that you’ve got the medical skills that you need to get the job done.
However, this doesn’t mean that you know all there is to know about the various aspects that go into running a business. Knowing the ins and outs of the endocrine system doesn’t mean you have a clue about healthcare interior design; being able to diagnose an infection on the spot isn’t going to prep you for dealing with business finances.
As this example shows, just because you have requisite expertise doesn’t mean you know how to run a business. Don’t think you know everything; you’re going to need help and to be able to learn on the job. If that sounds like your idea of hell, you might want to think again about whether a business is a viable step for you.
Mistake #3: Starting Too Big
By far the biggest mistake you can make when launching a business is starting with ideas that are too grand. Even if you can convince investors to get on your side, you have to try and keep your thoughts in line with the realities of the situation. You’re new to the business world and while you might have the best idea in the world, that doesn’t mean you have a proven track record of making it a reality.
Always look to make your business planning begin with a small scale, just to prove that you can do it. Going small, to begin with, will give you the chance to problem solve without being overwhelmed, ironing out the kinks for the expansion that is inevitably in your future.