If you are a budding entrepreneur and thinking about starting a business or buying a business for sale, there are certain pitfalls you should avoid in order to succeed.
Here are some mistakes that could be very detrimental:
Create a Business Plan
Failure to create a business plan after buying a business for sale. Your enthusiasm alone won’t do the job, and research, planning, and sales strategy will be needed to complete the package and ensure your success on a long-term basis.
Partnership or Sole Trader
Starting a business as a general partnership or sole proprietorship. If you adopt either one of these structures, there will be no legal dividing line between you and your business. That means that you will be jeopardizing your personal assets, and even your home could be at risk. However, this problem will be virtually non-existent if your business is an LLC, or an S or C corporation.
Can You Afford It
Buying a business when you are under-capitalized, carrying excessive debt, or unable to keep the overhead at a reasonable level. These financial mistakes can sabotage even the most promising business opportunity.
Taking Advantage of Tech
Not using modern technology to your advantage. If you are starting a business, note that there are websites and software available that can help your business to become established, grow and thrive. This will involve some expense and the investment of some of your time as well, but the benefits you reap will more than compensate you for both.
Seek Help When Needed
Carrying multitasking to an unreasonable level. If you buy a business and it really begins to take off, be willing to hire the help you need so that customer service, product development, sales and other aspects of running a successful company will not be neglected.
Who Is In Charge
Starting a business that involves associates and partners, but is lacking in formal, written agreements. This means that here will be no definite limits of authority, disagreements will develop, and the people involved will tend to act autonomously, rather than as members of a team.
Not Paying Attention to the Competition
If you fail to do this, in time you will find that you are lowering prices in order to compete as the “new kid on the block.” Instead, think of something that will make your company stand out from the rest, and establish a loyal customer base.
Seek Legal Advice
Failure to obtain assistance from legal and accounting professionals when you need it. You may think that you are economizing when you attempt to handle certain technicalities as you start a business, but if you end up facing bankruptcy, you won’t have a choice. Remember, when it comes to business matters, working with an accountant and lawyer is similar to preventive medicine.
Not Hiring the Right People
You may be so involved in product development, dealing with suppliers or sales that your interviews with prospective employees become brief and superficial. Also, as your staff grows, proper supervision will be a key element of your success.
Choosing the Wrong Location
For decades, entrepreneurs have stressed that selecting the right venue is essential if you want your business to thrive, and you will need to focus on such factors as visibility and traffic problems to ensure that you will be easy to find.