In this article you will know the 5 beginner mistakes when starting a business. Knowing them will allow you to prepare and avoid them.
Go to Google and type “how many businesses fail”. The statistics are not very encouraging. The results say the following:
- In Mexico, 8 out of 10 companies fail before reaching 5 years and 90% of SMEs do not survive 10 years.
- Then a portal in Spain states that 80% of new companies fail in the first year.
- In the third result, the Republic of Peru portal states that only 30% of microenterprises last over time.
Some very discouraging numbers. However, learning from the mistakes of other entrepreneurs will speed up your learning curve and give your business higher chance of success.
Pay attention to these 5 beginner mistakes when starting a business. That this does not happen to you:
5 beginner mistakes when starting a business.
1. Don’t think about taxes.
Balancing a budget is one of the biggest challenges for new business owners. Managing daily expenses is something that should not be taken lightly, let alone taxes.
Taxes are of the utmost importance, if you do not take them into account, this could be a silly reason to close your company.
If you behave like many inexperienced businessmen, you will probably underestimate the amount, or simply leave it for last. Thinking that at the end of the fiscal year you will take care of that could bring you a lot of problems.
Make sure you have adequate liquidity. If you can’t afford them, you could face a hefty fine or, in severe cases, jail time.
Experts recommend setting aside 20 percent of your earnings to ensure you can pay your taxes.
2. Not having a business model.
It is very common for an entrepreneur to underestimate the value of a business model. Which is one of the most common beginner mistakes when creating a company; since that is the main purpose of a startup.
In its beginnings, a company is designed to look for a model that works recurrently. That is, they must find marketing, sales, and production processes that work over time, that are repeatable and scalable.
Even if you think that everything is in your mind and that you cannot waste time making a business model; do it.
A business model is a guide, it is the structure of your company. It will allow you to analyze your activities and find errors. If you want a guide that allows you to develop your business model in just 7 days, click here.
3. Thinking you can do it all.
By creating your own company, you will be responsible for all aspects of your business. But don’t confuse that responsibility with doing it all.
You may be incredibly knowledgeable about your industry and even highly experienced, but that doesn’t mean you have the knowledge to handle all aspects and operations of your business.
You must be realistic about your own knowledge and experience. In addition to outsourcing tasks that do not belong to the core of the business.
There will always be people more qualified than you to fill certain positions.
You may know about bookkeeping, but there will come a point where you need help. You can hire an accountant once a year to make sure that job is done right.
You should also find a lawyer to contact from time to time, you don’t know when legal problems may arise.
While hiring these professionals can take a bite out of your budget, their fees will be much smaller than the penalties you could incur if you make a foolish mistake.
At first it’s okay to try to save, but there will come a time when you need to include these expenses and think of them as an investment.
Hiring people with other skills will also allow you to focus on the things you are good at and thus work efficiently.
4. Just think about growth.
It is natural that when you start you have big plans for your company. But taking an aggressive approach to business growth is an all too common mistake.
“It happens a lot,” Erik Rannala, co-founder and partner at Mucker Capital, told the Entrepreneur portal.
“People raise money, think they are full of cash, and then spend it on the wrong things. But when they realize the spending isn’t getting them anywhere; it is often too late.”
It is true that you should reinvest the profits, but you should only invest it in essential things for your company at this time.
While it’s good to think about what’s to come, it’s more important to lay a solid foundation for your business. Otherwise, you may not have a future at all.
5. Mix your professional and personal life.
Although your financial health is important, mental health should not be underestimated. However, it is one of the beginner’s mistakes when creating a company.
The common habits of people starting a business, such as working from home and taking customer calls on the weekends, can lead to a merging of professional and personal lives. Yet keeping these aspects separate is essential to creating the balance we all need for good mental health.
- Learn how to set up your voicemail so it can collect your business calls outside of business hours.
- If you work from home, be sure to restrict your activities to a specific place and time. When you are with your family, you should change gears and return to your personal life.
- Avoid putting aside social commitments to be able to work, because spending time with family and friends will help you recharge your energies.
Conclusion.
Don’t let the statistics at the beginning of the article get you down. Instead, learn from rookie mistakes when starting a business.
By doing things differently, you can maximize your chances of succeeding in the competitive world of business.
Many successes! 🙂
And remember, if you are really interested in creating your own business, you can read our book “How to create a company while working: Discover how to manage your time, manage your money and motivate yourself while creating a company and working for another” , where you will find all the information you need to found your own company, without having to leave your job.
