by Joy Mali
Starting a business can be taxing, especially if you don’t know the ins and outs of the industry. For a first-timer wanting to take business matters into your own hands, you must follow strict rules and guidelines so that you’ll be successful when it comes to selling your products and services. Of course, there will be the mistakes you need to avoid, but in order to stay away from them, you must be aware of them. Here are some of the mistakes that you need to avoid if you plan on starting your own business.
Not Knowing Why You Want To Start Your Own Business
You need to know why you want to start your own business. Is it because you want to help the community? Is it because you want to take your finances into your own hands? Or is it because you want to become successful and grow stronger in the industry? Whatever the reason is, you need to make it clear to yourself. Otherwise, you’ll just be relying on excuses to forge ahead.
Your vision for your business should be crystal clear, and it should tug at your insides wherever you go. When this happens, you will view the startup of your business as part of everyday life. Gene Kranz, NASA’s flight director for the failed Apollo 13 mission, told Mission Control that failure is not an option. This should be your mantra for your business too.
Being Too Confident That Banks Will Loan You The Money
If financing your business with your personal savings is not an option for you, what should you do? You can borrow money from the bank, of course. The truth is, however, that new business ventures such as yours are proven to have a low success rate, so many banks will be hesitant to lend you money.
Nevertheless, this is no reason to be discouraged. There are some community banks that lend money to professionals, lawyers, dentists, and the self-employed. Normally, the only thing that you need to do to get a loan from one of these banks is to issue collateral such as your investments, house, or other assets. Of course, if your business doesn’t do too well, the bank keeps the collateral.
If you can finance your business with your personal savings using your own credit card, it is a good idea to do so. You should perform a credit check too, just to make sure that your decision won’t hurt your credit standing. Determine to what extent you’ll be able to finance your business and then add an additional fifty percent to that figure in case of unexpected expenses.
For advice on financial planning, you might want to talk with an expert consultant, who should be able to give you more detailed options.
Assuming That Customers Will Easily Find You (And Buy From You)
As a startup, you should know that to become successful with your business, you need to sell your goods and services. Before you start your own business, you already know who your potential customers are. Therefore, you need them to stray away from their comfort zones and start trying new things – specifically, your products and services.
This means you will need to spend some time wooing your customers and telling them about your business. If you work in the skin industry, for example, you need to make sure that your clients are the ones who are actually concerned about their skin and you need to tell them how your products will assuage those concerns.
Opening Your Business Without A Clear Exit Strategy
It may sound a bit odd, but when you want to start your own business successfully, you need to know how it will end. You should start with the end in mind. This way, your thinking will attract investors who share the same passion as you – with the end in sight.
It’s very possible that your business will succeed, but that doesn’t mean it’s a sure thing. You need to think about what you can do if your business is in trouble. You might try to sell it, but keep in mind that only around 10 percent of failed businesses get sold. Before you start putting things into actions, look up your options for what to do if things don’t work out and settle on a couple that you believe will work for you.
Joy Mali is an active finance blogger who is fond of sharing interesting financial management tips to encourage people to manage their personal finances.