People like to say that we are living in the golden era of entrepreneurship. These folks are, to a large degree, right. The evolution of digital tech has lifted a lot of burden off the shoulders of ambitious businessmen when it comes to networking, marketing, and day to day operations. Bureaucracy has become much more open to newcomers as well.
But, as fortunate circumstances are helpful, the road to success is still riddled with various hurdles, some of which can prove to be fatal. As a matter of fact, according to some estimation, only 20% of new businesses survive past their first year of operation.
Let’s take a look then at a couple of tips that should help you avoid common beginner’s mistakes when launching a startup and earn a proper shot at glory.
Be passionate about what you do
This may sound a bit on the nose, but being passionate about what you do is the absolute must for staying in the business long-term. Building a successful enterprise requires a lot of time, hard work, and energy, regardless of the industry. To be able to bear with these hardships, you need to be passionate and fired up about it. So, ask yourself, are you willing to commit yourself 200% to the thing sitting at your drawing board? If the answer is no, maybe it’s the time to scrap the idea and start working from the grounds up. You don’t want to replace one workplace you hate with another one.
Start the company while you are still employed
Sure, starting a company while you are still doing your 9 to 5 job may sound overbearing. But, let’s go back to the fail ratio we gave you above. The current economic outlook is harsh and gives you only a 20% chance for success. The good old employment you are so desperately trying to run away from gives you that safety net that you need to run your startup clear-headed, with both feet on the ground and without pressure to deliver. People who are putting everything on the line are prone to knee-jerk reactions. Don’t fall into this common pitfall.
Pen out a simple business plan
You can expand this document as time goes by, but throwing yourself into entrepreneurship without any plan to guide you through your first year and give you a reference point to measure how far you have come is a one-way road to disaster. But what does the business plan consist of? Well, let’s take Australia as an example of a developed, startup-friendly country and see the guidelines provided by its government:
- Business plan summary –Short description of the business, intended market, future of the business, etc.
- Description of the Business – Registration details, premises, organization chart, management, etc.
- A detailed description of the market – Market research, market targets, competition, etc.
- Future goals – Vision statement, mission statement, goals, and action plan.
- Finances – Key objectives, financial review, startup costs, balance sheet forecast, etc.
- Supporting documentation
Now that you have the business plan sorted out, reaching out to various investors and banks will be much easier. You will look like a far more credible party. All you need to do is to nail the pitch. Keep in mind, though, that in some cases pursuing loans for specific tasks may get you far more favorable deals. If we once again go down under for an example, we can see that some companies focusing on car finance in Australia offer much better loan terms than banks. Great way to start a business fleet. You can try out a similar approach when purchasing the premises and other important business assets.
Know thy legal requirements
Laws are boring, and no one cares to read them through. What makes this issue even worse is that legislation tends to vary from country to country, state to state, and even industry to industry. But, accounting systems, taking care of business-specific tax liabilities, and following employment laws do require a good knowledge of local legislation. Of course, you always have the option of hiring legal help, and we advise you to do so. But even so, engaging in this complicated legal mess without even the most basic legal knowledge can be best described as running blindfolded.
Don’t start the business alone
If you follow our advice and try to launch your startup while you are still employed, you will have a lot of things to handle. Why wouldn’t you share this burden with someone equally passionate as you? Experience and connections within the industry are highly preferable. Partnering up with someone may take some of the decision-making freedom we are sure you are craving for right now but, on the other hand, you are also getting a valuable second opinion and someone to keep you in check. If you are not too keen about this, a seasoned mentor or advisor will provide adequate guidance.
Be very picky when selecting the employees
These people need to be soldiers that will get your organization through that fateful first year on the market. If everything goes well, they will groom you into senior staff and direct you to participate in the company’s management. So, you use the job interviews not only to assess the candidates’ skill sets but also to get to know them personally, see how well you interact with each other and how far you can go as a team in the future. Plowing through all the challenges you will face sooner than later will be much easier if you are working with the persons you like and care about.
We hope these few tips gave you some general idea about the things you need to do and to avoid if you want your aspiring business to take off. The current business environment has a lot of good things going for it but also presents a log of challenges. But, how far you will be able to go will ultimately depend on your drive, your dedication, and your hard work. We showed you where you should focus your efforts. Now, it’s your turn to rise to the occasion.