Having a great business idea is marvellous, but that alone will not necessarily guarantee your success. You may think that your idea and proposal are the best, however, beware of becoming overconfident. Budding entrepreneurs should never underestimate the importance of patience and caution when they enter today’s highly competitive and turbulent marketplace. Before even considering moving forward, it is crucial that you have a well thought out plan.
There is nothing more exciting than venturing into a new project with the best intentions in the world. However, remember that thousands of people have been exactly where you are now. But not all of them succeeded. In fact, many failed. Mistakes that some startup founders made turned their dreams into absolute nightmares.
You need to become aware of these mistakes, look out for them, and make sure you do not make them yourself. Accotax Chartered Accountants in London describe the five the most common mistakes budding entrepreneurs make:
Putting all the weight on the idea
You have a super idea – that’s wonderful. However, now what? You definitely need a business plan that lays out where you should start, what part to follow, funding required, etc. You also need to be sure that what you propose is realistic and achievable.
One thing is to have it all in theory, but it needs to be put into practice. Are you ready and willing to face and deal with the headwinds and challenges ahead?
According to today’s most successful entrepreneurs, a business plan can significantly reduce your risk of failure. Apart from giving you a clear idea of what your goals and strategies should be, it also helps you measure your progress.
Not having the legal and accountancy team on board
Starting a business requires a lot more paperwork than you would have anticipated, so, it is always a good idea to have a lawyer and an accountant on board with you from the beginning.
HMRC (Her Majesty’s Revenue and Customs) does not play around with its rules. They are the last people you want to have problems with. Compliance with local and national business and tax laws is a vital part of business success.
Having a team of specialized professionals focusing on everything legal and tax-related frees up time for you to focus on getting your business to thrive. If you are looking for accountants you can always drop us a message or come and visit us. Accotax have professional accountants who have helped many startups and led them towards success.
Just because you have the capital does not mean you have to spend it right away. You must make sure you spend enough so that your company gets off the ground, but not so much that you end up with serious cash flow problems.
Start off carefully so that you can feel your way and get a better idea of what works and does not. Keep a close eye on what gives you a good return. Ploughing your profits back into the business, especially during the initial years, is crucial if you want to become a major player one day.
If you try to grow too quickly, your risk of failure will increase dramatically. It would be a pity to fail because of a mistake thousands before you had made and which you could have avoided.
Employed somewhere else while trying to launch
Launching a startup is a full-time job. In fact, sometimes it is even more than that. Don’t try to launch while still working in your current job. Your new company needs 100% of you – your individed attention and energy. This is not possible if you are working somewhere else for eight hours of each day.
Your competitors, i.e., other startups, are unlikely to be run by part-timers. This means that you, as a part-timer yourself, will be at a huge disadvantage. Their chances of success will be much greater than yours if you do not give the whole project your all!
Giving someone else the responsibility of running your business
What is the point of setting up your own business if you are not going to run it? You need to be there from day one. At a later date, as you recuit more staff, you could focus on one person with a view to promoting them.
You should not hand over great responsibility to somebody if you have not been working closely with them for a long time. You need to be sure they are competent, trustworthy, dedicated, and hardworking.
The initial set up, expenditures, new employees, suppliers, profit margins, etc., need to be established by you. You need to be there to make the important decisions.
Setting up a new business is exciting. However, be prepared for hard work, some disappointments, and many challenges. If you give it everything you have, and avoid these five mistakes, your chances of becoming a successful businessperson one day will be much greater. Good luck!
Interesting related article: “What is a Business Plan?“