Six common mistakes people make when going into business
6 Small business mistakes to avoid
According to the Office of National Statistics, more than half of all small businesses in the UK will go under in their first five years.
Well, actually, yes – it means that almost half of them face all the difficulties and risks involved in running their own businesses but still succeed.
If running a business was easy, everyone would be doing it!
Here are some start-up mistakes to avoid, to help you make sure you’re in the successful half.
1. Don’t try to do everything yourself
Business founders usually have a wide skillset, which they are forced to broaden swiftly as they get to grips with the 1,001 aspects of running their own business.
Entrepreneurs and especially new entrepreneurs, often find it hard to delegate, fearing someone else will never do as good a job as they will.
This is one of the most common mistakes of startups.
Unless you are brilliant at everything and also have 172 hours in your day, it’s unrealistic to expect to do everything yourself. At best you risk using your time inefficiently and at worst, you risk making poor decisions in areas in which you are not an expert.
The things you really need to focus on are your core skills – the ones that got you into business in the first place – and managing the business and your people.
Marketing, copywriting, design, accounts and tax planning are all examples of areas where you may be better off hiring professionals. You can either hire this expertise in as and when you need it on a freelance basis, or employ permanent members of your team.
The exception to this is people management which is not really something you should expect to be able to outsource successfully.
Although you can hire people to manage individual teams, you are still going to have to lead the business as a whole, set the tone and the culture and of course, manage the managers. All possibly without much training, guidance or experience in navigating the murky pool of leadership.
To some extent, management is intuitive.
But if we could only give you one tip, it would be to get to know and understand each team member as an individual and learn how to get the best from them.
Learn both to pick your battles and to be firm when the situation requires. This can be much more difficult than you would think but will win you more respect in the long term.
People often say you can’t be a manager and a friend.
While this isn’t entirely true, real friends don’t shy away from having difficult conversations with each other; they tackle issues honestly and constructively.
Just remember to be kind, fair, respectful and truthful.
2. Have a plan
You don’t need to be too prescriptive but you should have a realistic business and financial plan setting out your goals, budgets, performance, revenue and expenses – and you should check each month how you are doing against it.
Your plan should cover several possible scenarios, looking at different projections for factors including sales, customer numbers, prices and costs. In general, especially in the early years, you need to be very sensible with money.
Don’t overspend and always have something in the bank to fall back on for emergencies.
3. Don’t overestimate what you can do in a day
We all tend to make this mistake don’t we?!
But you need to make sure you don’t end up trying to do so much that you forget the important day-to-day tasks such as replying to emails quickly or even invoicing on time.
Try to be organised with your time and block off periods in your diary for mundane tasks as well as the more important ones, just as you would for meetings. Otherwise the danger is that they will never get done.
Stop trying to multitask – it’s not clever and it will trash your efficiency.
And just as you need to be realistic with what you can achieve, so you need to be realistic about what your company can achieve, too.
Over expansion kills a lot of businesses.
If you just concentrate on trying to make as much profit as possible as quickly as possible you may fall on your face. A modest profit is better than none at all.
4. Never forget that nothing is more important than your customers
If you have fallen short in your standards of service, just admit it, apologise and make good.
We often hear the expression “difficult customer” but more often than not, it’s actually the business which is being difficult. Most customers just want a trouble-free experience and to receive what they have paid for.
To help you provide a good service, hire people who are both talented and hard-working and who also share your values.
Hajmil Carr, CEO of US publishing and marketing company Trueline Publishing, recalled in Forbes:-
“I once made the mistake of thinking that money motivates most people and as a result, I cultivated a staff of mercenaries, which is not what I wanted at all.
I have now come to realise that generally, my team are motivated by the same things that I am: – meaning and purpose.”
5. Don’t be too hard on yourself
Before you even start out, you should accept that you are bound to encounter many challenges and difficulties along your journey.
As Ian Knowles, founder of New York City investment and strategy company Spruce and Norton, pointed out:-
“Half of success is determination, persistence and grit. When you hit the inevitable speed bump, recognise that it’s all part of the process. Don’t waste energy on negative thoughts. What they say is true: – to whom much is given, much is expected. Keep going!”
Accept that it’s going to be tough and instead of berating yourself, seek help from advisors and mentors who can support you, challenge you, give you the benefit of their experience and help you overcome obstacles.
And one last thing NOT to do when starting a business:-
6. Never, ever stop believing in what you are doing.
We can offer support for all your financial and tax tasks, acting as part of your team. We have four offices located in Chelmsford, Cheam, Wanstead, Saffron Walden and London City – just give us a call on 020 8989 5147 to chat about how we can help.
About Mark Boulter
Mark Boulter is responsible for the efficient running of the firm’s infrastructure, and ensuring that THP delivers the best client service. Promoting the vision and culture across all branches, people are the key: “I like people who have a fresh approach and I’m happy for them to run with their ideas,” he says.
Communication across departments is crucial and Mark pioneers this. He ensure that people and departments not only talk to each other, but that they share ideas– whether they’re about marketing, finance, sales, strategy or any other topic that can result in us offering a better service. “I think helping to develop the next generation of THP people is essential to our success,” Mark adds. “We’ve a lot of talented people and our way of doing things increasingly attracts ambitious newcomers who are looking for a fresh approach. That’s good for us and even better news for our clients.”