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According to Startups Magazine, there have been over 200,000 UK start-up businesses set up in the first 12 weeks of 2023, a record number despite the difficult climate. Starting a business is challenging, but there are lots of areas you can focus on to make sure your business survives its first year and thrives in the years to come. Here’s five common mistakes people make when they first start a business and how to avoid them.
Lack of planning and preparation: Many new business owners jump into starting a business without proper planning and preparation which can result in costly mistakes and a higher risk of failure. Write a twelve month and a three-year business plan, and don’t forget to include your businesses’ mission, vision and values*. These play a huge part in defining the direction, culture and motivation of your business to drive everyone forward.
Underestimating start-up costs: Some business owners underestimate the costs involved in starting a business, such as equipment, supplies and building a team, which can lead to financial difficulties down the line. Make sure you do your research at the planning stage and talk to other business owners in the same field to gain knowledge on the less-obvious costs that may crop up.
Failing to conduct market research: Failure to conduct thorough market research can result in poor product or service positioning and a lack of understanding of the target market. This will have a negative impact a business’s success, so take your product out on the streets and talk to people, or if it’s a service, offer a BETA version at a reduced price. Gather feedback and make adjustments based on your ideal client or customer.
Neglecting legal requirements: Neglecting legal requirements, such as obtaining the necessary licenses, permits and contracts can result in costly fines and legal issues for the business. Do your research in advance and keep records of notices or renewals somewhere you can set reminders so you can plan for their renewals financially. Keep up to date with contracts for your own service providers as well as your contracted workers.
Not seeking professional advice: Not seeking professional advice from accountants, lawyers, and other specialists can result in poor financial management, legal issues, and a lack of support during the start-up phase and beyond. It’s important to seek out the guidance of experts to help ensure the success of your business, especially in the first 12 months. Joining a business network such as the FSB, the IOD, or the British Chambers of Commerce can be a great source of free advice when you’re just starting out.
I hope you’ve found these pointers helpful. I’d love to hear from you about your journey into business and how you’ve navigated the first twelve months. I think it’s safe to say we have a nation of brave entrepreneurs in the UK who are committed and excited about starting something new. Where are you in your journey?
If you would like some additional help getting started, you can work with me on your business strategy and operational plans one-to-one. Simply book your session via this link. I also have some great resources – check out my Mission, Vision and Values workbook and my new 90 Day Business Action Planner, available to buy on Amazon!
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