Everyone makes mistakes—it’s only human to do so. But for entrepreneurs with big business visions and dreams, making mistakes could cost a fortune. The pathway to success isn’t perfectly laid out, which means a bit of trial and error is an inevitable part of the process. No one said starting a business was easy! Trailblazing business owners should constantly be concerned with how their decisions may affect their business on a larger scale. Instead of preparing for how to salvage the damages, plan ahead and accordingly to avoid making these five common mistakes.
5. Overspending and underspending
As grand a quest as starting a business may be, it doesn’t necessarily require huge financial investments to get off on the right foot. It’s easy to get caught up in the desire to buy the best of the best the market has to offer when basic materials, equipment, and services might do the trick just as nicely. On the other end of the spectrum, business owners who don’t invest enough into their venture and purchase cheap materials, equipment, and services may find that their success potential stunted. Finding a middle ground takes a lot of research and plenty of budget consideration. It’s okay to splurge on certain equipment and it’s okay to save on certain equipment. It’s the process of figuring out what is worth shelling out for and what is not that many startup owners don’t evaluate.
Creating a budget is a surefire way to avoid making a grave spending mistake. Being able to find that balance is crucial in determining how to optimize your business capital. Though the best business people always say that you shouldn’t be afraid to fail, that doesn’t mean you should be unphased by it. Plan smarter for more calculated results. Spending adequately is the first step.
4. Botching tax season
No matter how many tax seasons you’ve lived through, each and every time it rolls around, you’re always a little panicked about having proper finances and documentation in order. The first mistake new startup owners make is forgetting about tax season until deadlines are just weeks away. Tax season should always be in the back of your mind as a business owner. In order to stay on top of your federal obligations, avoid these four common tax mistakes.
- Not paying quarterly taxes
- Combining personal and business finances
- Putting off unfiled tax returns
- Filing under the wrong legal entity
3. Hiring the wrong people
The hiring process is one that is equal parts exciting and stressful. Having built your business from the ground up, hiring people to join in and contribute to the future of your vision can be daunting. You want to trust your employees to add fuel to the fire rather than extinguish it. Hiring the wrong people can have the latter effect. Do some extensive research on how to build your business entourage and how to do it effectively.
Take your job listing to sites like LinkedIn and ZipRecruiter to attract top talent. Go over resumes meticulously and nail down a foolproof interview system that makes weeding out the potentials from the definites.
2. Not knowing your market
One of the biggest mistakes business owner make is following their vision without surveying the market they intend to enter. Before investing thousands of dollars into building a dispensary, it’s important to know the legality, the people you’re selling to, and the location where you would find most success.
The same applies to the tech, art, automotive, and marketing worlds and more. Think of it this way: if you don’t know who your ideal customer would be, you will likely have a difficult time figuring out an effective marketing campaign. Before diving in, do your share of market research to ensure this business model is profitable and sustainable.
1. Growing too quickly
Any entrepreneur wants to see their ideas take off, but when things move too quickly, it’s easy to find yourself in hot water. Growing too quickly has many faces—having too many employees and not enough money to pay fair salaries, spreading employees too thin with work, and hyper-focusing on quantity rather than quality are all red flags. Keep your scale reasonable and realistic by planning out every step of your growth plan.
In the business world, there’s no such thing as overplanning. Take your time on your pathway to success—it’s the little things that will make or break your business, so be sure to careful every step of the way.
Guest Contributor: ADAM PEPKA
Adam enjoys a comfortable life in Tucson, Arizona but is proud of the humble beginnings from which he came. Growing up reading authors such as Timothy Ferris, and feeling inspired by their bootstrap beginnings, Adam was determined to find financial freedom himself. He soon became a successful real estate mogul after one deal led to another, and not long after Adam began his own fix-and-flip enterprise. Aspiring investors and HGTV fans alike enjoy reading his blog about the various challenges and accomplishments he finds in each property renovation, as well as the tips and tricks he suggests for those considering their own fixer-upper. In between remodels, Adam enjoys teaching his audience about various investment strategies and how any Average Joe like himself can build a profitable portfolio. Apart from real estate, he’s very much interested in Silicon Valley, venture startups and the technology industry. He watches that arena with a careful eye, and is the first to alert his readers to major news or event