Image Source: Pexels    Cameron Ward Biz Wealth Builder

In this article, we’ve compiled a list of common mistakes made by new entrepreneurs and how you can avoid them to ensure your business dream becomes a success.

The excitement of starting a home-based business is a rush like no other.  But before diving into the thick of things it’s important to take a step back and ensure you lay strong foundations that’ll support your business for years to come.

In this article, we’ve compiled a list of common mistakes made by new entrepreneurs and how you can avoid them to ensure your business dream becomes a success.

Overlooking The Importance of Planning

The lack of planning is one of the prominent reasons for small business failures. Here are two common areas which entrepreneurs often overlook:

• Financial Planning: Without a concise expectation of costs and revenue, you will be unable to make informed decisions regarding your business. The first twelve months are crucial, and you should have accurate financial predictions for the same. Additionally, you will need these to secure funding from investors as reported by Mass Challenge.

• Business Structure: Running a business as a sole proprietor exposes assets such as your home, car, savings, and more risk of litigation. For protecting your assets, choose to register your business as a Limited Liability Company.

Conducting Inadequate Research

As reported by Zippia, only 55% of new small businesses survive the five-year mark. Common reasons for these can include:

• Not Understanding Your Target Market: Without adequate market research, it is impossible to find your niche i.e. the select type and number of customers to whom you can sell your products.

• Setting Wrong Prices: Pricing is a complex decision that involves a deep understanding of competitor prices, customer expectations, and business revenue requirements. By setting the price too low you may undercut the competition, but be unable to cover your costs.

To overcome these pitfalls, it’s important to conduct thorough market research, consistently gather customer data, and keep a close eye on your competition.

Location, Location, Location

Another part of the planning stage that budding entrepreneurs need to add to their to-do list is deciding where they will run their company. Keep these considerations in mind so you don’t run into any speed bumps:

• Working from Home: It’s easier than ever to run a business from home thanks to ever-evolving technology that allows entrepreneurs to communicate remotely with staff and clients.  Before setting up shop at home, make sure you live in an area where you’re allowed to do so in order to avoid legal issues. Once you know your neighborhood is zoned to run a business, pick up all of the essentials you need for a productive home office.

• Buying or Renting a Private Space: Certain businesses, like restaurant and retail companies, need brick-and-mortar establishments to operate. It can be tempting to go with the first space you find so you can hit the ground running, but look at a few different venues to make sure you’re not overpaying on rent, which can be a huge burden to your startup funds.

• Renting a Co-Working Space: If you want to work outside your home but don’t have the budget for a private office, joining a co-working space is a good compromise. Just be sure to find a place with all of the amenities you need (like reliable internet, an optimal layout, and a budget-friendly price) so you can be confident you’ll be able to run your day-to-day operations smoothly.

Refusing to Take Help

Trying to do everything yourself results in inefficient use of time, and lower productivity. Overcome this common drawback by:

• Hiring Freelancers: From marketing to customer services, hire skilled professionals on a project basis to meet your business goals.

• Finding a Partner: A partner can help you create business plans, find funding and bring expertise to steer your business in the right direction.

By avoiding these common mistakes you will start your business off on the right note and be able to experience sustained success for the foreseeable future.