Okay, the title is just cautionary. We really hope you are killing it with your business! But, it’s crucial that you consider the common ‘first-year pitfalls’ and prepare better. After all, 20 percent of all new businesses fail in the first two years of operation! We suggest you think about this statistic as it truly reflects how competitive industries and the market is becoming. So, how do you plan to successfully launch your company and run a profitable startup? Well, first, keep yourself from these five pitfalls businesses make in the first year.
Doing it all by yourself
Although the hunt for the right talent has become more challenging than ever, it should not stop you from building a team of people you can trust. Take it with a grain of salt, but you cannot run a business all by yourself. If you’d try, we are certain that it won’t grow fast. So, make sure you have the right person to meet the challenges of some of the most demanding business operations. It will keep you from experiencing burnout.
Not opening a separate bank account
Stop running your business through your personal bank account! Do your future self a major favor by opening a separate bank and credit card for your enterprise. Make sure all the business-related transactions happen through this account. Why? It will help you keep track of your transactions and maintain an impeccable book. Also, you will have easy access to all the expenses and income during tax time!
Failing to control costs
Your business’ sustainability depends on how well you balance your finances. So, get in charge of your investments and expenses. Be extra cautious while spending as unnecessary expenses might lead to a significant financial breakdown in the future. Avoiding this pitfall is easy. Just align your business expenses to these strategic goals - 1) Product development, 2) Customer acquisition, and 3) Risk management. It’s the best way to keep your expenses in check.
Letting distractions set the direction
The market is full of opportunities - that’s one lesson you will learn as you try to grow your business in the future. However, the opportunities can, many a time, make it difficult for entrepreneurs to stay focused. Ambitious business owners find it hard to stay committed to the business or task at hand. This is a major pitfall as such distractions lead to wishful thinking. Stay focused, and don’t let distractions make your choices.
Ignoring the risks involved
Entrepreneurs that don’t think of the business risks often hit a brick wall. Even overly optimistic financial projections can lead one to make disastrous business decisions. Think critically. What are the possible risks that might impact your business in the short and long term? You should pen down the risks related to business insurance, business revenue, the recent pandemic, possible natural disasters, data security, competition, and more.
Keep reading!
Starting a company and running it profitably is a massive challenge, regardless of when you intend to launch. However, avoiding the common pitfalls we mentioned in this post can easily put you ahead of the competition and help you recover better in difficult times. Do you have any more challenges or pitfalls to add? Let us know in the comments. Also, don’t forget to check out other important posts on the blog!
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