This guide outlines the damaging business fails you should guard against when first starting your venture.
Are you planning on starting a business? Or have you recently started a business but don’t know where to go from there? In either situation, you’re at the crossroads between a successful business and a startup that doesn’t go anywhere.
3 worst business fails for startups
With that in mind, let’s look at some common business fails people make when starting a business and how you can avoid them.
Failing to Plan
Simply put, if you don’t have a business plan, you don’t have a business. It’s like trying to walk down a road blindfolded, you will fall into every pothole and trip over every obstacle along the way.
So to avoid this worst of the business fails, before you start trading in earnest, it’s time to create a business plan. Work out what you want out of your business and what you need to achieve that.
You will need a business name to register it anyway, as well as a description of your business and what niche it covers. If you’re offering a service as a freelancer, the business name can simply be your own name, or it can be something more descriptive of what you offer.
You also need to plan where you want your startup to go. Do you want to keep it small and contained, or do you want your business to grow to new heights? Will you need a financial investment? If so, any investors or lenders will require a plan to prove you know how to make a profit with their money.
Neglecting Your Taxes
Very few people enjoy paperwork, but it’s a necessary evil in life and business alike to avoid failure. Every business needs to fill in a tax return each year. True, in some places, your business won’t owe tax before a certain amount of profit, but that tax return still needs to be filed correctly and without any mistakes.
Thankfully you can use different services that are designed to help deal with taxes for startups. Ideally, you should use accountants and experts who can provide specialized advice.
As well as avoiding any business fails that can lead to added costs later down the road, tax experts can help businesses and startups save money and take advantage of certain tax breaks or grants. By cutting down on expenses, you increase the amount of profit for your business.
Mismanaged Marketing
When you run a business, you’re essentially trying to take on multiple roles at once. As well as handling the products or services themselves, you’re also tackling all of the administrative duties and any management duties you may have.
This means that something might give. Often, the thing that gets left in the smoke is your marketing strategy. This is one of the key business fails in the early stages.
But a business can’t survive without customers or clients. The only way to have a successful business that you can rely on is to have a steady stream of customers who can provide a comfortable income. So, keep your marketing strategy ticking away at all times, so you can continue to grow and develop your business without it falling by the wayside.
Conclusion
While it’s impossible to eliminate all mistakes, careful planning, market research, and careful attention to financial matters can significantly reduce the likelihood of major businesses fails in the early stages of setting up a business.
If you’re seeking external funding, avoiding major mistakes demonstrates competence and professionalism to potential investors. Investors are more likely to have confidence in a business that has a solid foundation and a well-thought-out plan.
