Starting a business isn’t always easy. Sometimes mistakes are made when investing in a product or running a startup, and that’s okay. However, owners and partners should be doing what they can to avoid the unnecessary. There are a few steps you can take to avoid mistakes that are common to startups. From planning to finding the right liability insurance, here are 5 startup mistakes that you can easily avoid with just a bit of research.
1. Not Building a Business Plan
There is nothing wrong with being motivated, but startups need to make sure a plan is in place. According to the SBA, a basic business plan should include: a summary of your company’s profile and goals, a description that includes what the business does and what markets it serves as well as a market analysis and more. A business plan lets investors and lenders know you have a well-thought-out idea of business’ service or product line and how it will benefit others.
2. Ignoring Insurance
Startup founders and entrepreneurs are often optimistic and confident. For this reason, some fail to anticipate pitfalls or the results of risks they take. Each business has different levels of risk, but each and every business, whether it is a one-person startup or large corporation, need some type of business insurance. While errors and omissions insurance policies may be most beneficial for consultants, liability insurance is necessary for those with brick-and-mortar locations.
Quick tip: Meet with a lawyer or a startup insurance specialist to see where your business may be at risk and how you can protect the company and yourself.
3. Forgetting about Local and State Regulations
The state where the business will be located will require you to get licenses, permits, tax registrations, and other requirements. You’ll also want to pay attention to your town, city, and county regulations as different locations have different environmental regulations, zoning ordinances and necessary permits. When you’re calculating the cost of your new business, be sure to take these sorts of regulations and the cost to obtain permissions in to account.
Quick tip: Start your research into the license and permit requirements for your startup by talking to city and county officials. Many states and counties provide the information online, so be sure to do a search on each site.
4. Improper Allocation of Resources
Startup companies are often focused on finding funds to get and keep the operation running. Money and budgets are always a concern. However, over- and under-estimation are common problems. Many businesses take a year or two to get going, so make sure you have enough time and money to dedicate to your startup for this period of time.
Quick tip: There are enough complications and risks in starting a business, and worrying about funding could distract you from running yours successfully. Make sure you have more than enough funding, without much debt, to get your business going – you never know what could happen.
5. Neglecting Marketing
In the early stages of a startup, you may not see the need for marketing because no product or service is currently available. However, you cannot neglect this area of your business. Effective marketing leads to sales, investors and interest. You need to know your product or service’s target audience before trying to launch your business. You can alter and create new products and marketing messages keeping that audience in mind.
Quick tip: Take advantage of the business software solutions that can help propel your startup into success. From email automation to payroll, there are lot of affordable options available and some of the best solutions are even free.