Every business owner has to start somewhere, and at one stage, even the world’s most successful company owners were naive and inexperienced entrepreneurs. It’s not until you set up and run a company for yourself that you truly understand what it’s like. Mistakes will be made along the way, but if you do the research and prepare yourself as much as possible, you give yourself the best chance of success.
Here are a few things to bear in mind when you’re about to, or have just set up your first business.
Not wanting to delegate
This is something that lots of new business owners can struggle with. Your business is your baby, it’s easy to feel like no one can do the work as well as you. You end up taking on far too much and in time, nothing gets done to the best standard. As things begin to grow and snowball, you need to be able to bring in employees you trust who can get the job done. Micromanaging is bad for both you and them and adds to stress. Take your time during the hiring and recruitment process, and employ a candidate that you feel is right for the job. Provide them with good training, and then leave them to get on with the work you assign. It’s the only way you can grow and move forward as a business. The end goal for most business owners is to have a company that essentially ‘runs itself’- turns profit without them needing to do any work. You will only be able to achieve this by hiring the right staff, and letting them get on with their job.
Employing friends and family
Speaking of hiring workers, one mistake that lots of new business owners make is hiring loved ones. It seems to make sense, you know them and their background, they need a job and you have vacancies. But in most cases, it’s actually not the smartest move. Since that personal connection is already set up, it’s difficult to get past to establish a business partnership- there can be conflicts of control and it can be difficult to discipline them if they’re not pulling their weight. You can feel obliged to keep them on, even if they’re not the best fit for the role due to personal circumstance. And these kinds of things can all lead to your business suffering. When it comes to worker/ boss relationships, it’s often best to hire a stranger- keep things friendly yet professional and there are clear boundaries set. When your workers are also your loved ones, it can lead to headache and heartache.
Not being prepared for fluctuations in sales and profits
All industries have their busier and quieter times throughout the year. For example, retail and hospitality businesses will be always be busier over public holidays such as Christmas, and then experience quieter periods afterwards. Many industries will experience a decline in customers over April as it’s tax time and everyone is spent out after paying their tax bill! However, if you’re an accountant for example, this will be your busiest time! As a new and inexperienced company owner, it can be easy to overlook these kinds of seasonal trends, but it’s important that you’re prepared. Know when the quieter times for your industry are likely to be, so you can ensure you’re still able to cover costs. There’s software you can get to look at the type of data analytics surrounding spikes in sales or changes of website traffic on certain days too. This can be helpful in enabling you predict busier and quieter times. It can also allow you to pinpoint if there was a particular marketing method you used which was especially successful.
Overlooking the importance of marketing
Speaking of marketing, this is another extremely important thing to get right when you open any kind of business. Many naive entrepreneurs have a ‘build it and they will come’ attitude, not realising just how much competition there is out there for every kind of business. You need to be getting the word out there to people who are likely to be interested in what you do. Not only that, but you need to convince them that they should choose you over the other many similar businesses out there. Find a good marketing company who will use techniques such as blogger outreach and SEO, video marketing and social media marketing to promote your business. There are things you can do too, even without much marketing knowledge. Have some merch created- keyrings, cups, pens and other smaller items with your brand name on and hand these out at expos or as free gifts with purchases. Hold an event at your premises, inviting people to come down and offering food and drinks- you could show samples of your products or what you do and use it as a way to educate people locally about your business.
Not preparing for your tax bill
As a business owner you’re responsible for paying your own taxes, which aren’t always the easiest to work out. It’s worth getting into the habit right from the start of putting away twenty percent of your profits, otherwise you can end up in a position where you can’t afford to pay it. An accurate tax bill relies on accurate bookkeeping and so your records need to be done perfectly, you could hire your own accountant and find good software, or you could outsource to a professional company. If you want to avoid the headache completely, have them submit your return for you, tax accountants will know how to claim back the right expenses so you’re not paying over the odds. Get this wrong and you could end up with penalties and fines, if you underpay (and the government believe it’s been done on purpose) you can even end up with a prison sentence! Get your tax right, prepare for your bill and hire the right people to complete your return.