Six mistakes for the first time business owner to avoid
Successfully starting your own business is equal parts difficult and rewarding. Forming a limited liability corporation can give you both the freedom and oversight to realize your creative visions. However, there are some pitfalls to avoid.
1. Focusing only on sales
Having a stream of revenue is important for keeping your business afloat. However, it’s also important to be sure that you’re strong in each part of your business. Developing a strong infrastructure and oversight system will help manage your sales efforts and support your delivery of the best possible product.
2. Lack of customer service
As a sole proprietor or owner of a small business, you likely have a lot on your plate. Customer service can become one of those facets that winds up slipping through the cracks. In your rush to perfect and sell a product, it’s easy to forget to solicit feedback and make adjustments. In the long run, however, consumer relations are the key to attracting and retaining long-term clients.
3. Poor hiring habits
Your business will only go as far as your employees, and if you don’t hire the right ones, you’re putting yourself at a massive disadvantage. Some new entrepreneurs have little experience in hiring, and are thus ill-equipped to choose the right candidates. Others may default to family or friends, anxious to surround themselves with people with whom they feel comfortable. Rather than panicking, it’s important to carefully consider the entire hiring process, and do as much research as possible before picking the right person. If you build your staff correctly the first time, you can cut down on expensive and time-consuming turnover.
4. Charging too little
This issue generally has two root causes: an entrepreneur has a poor idea of the market value of his services, or is worried that no clients will be interested at reasonable prices. Either way, this represents a potentially fatal oversight. Do some research before you go to market, and price your services competitively but not ineffectively. Your time is valuable — treat it as such.
5. They ignore taxes
Taxes aren’t just something to think about every April 14. It’s critical to continue to do everything you possibly can to minimize these costs, because they will represent a large part of your overhead expenses. If you are just starting you, it may be worth incorporating your company in Delaware to take advantage of the state’s long history of fairness in business dealings. Also, you should be well acquainted with the IRS’s small business center — it contains an array of critical information.
6. Lack of planning
You wouldn’t build a deck without a blueprint, and you shouldn’t start a business without one either. Before you think about incorporation, you should consider both your own goals and the current market context in which you hope to achieve them. Too many companies grow in ways that takes them from their core ideals, and by the time they have a chance to regroup, it’s too late. Flexibility is valuable, but it should be centered around a core plan of attack — otherwise, you may wind up bent out of shape.