When starting a business, there is a great deal that one needs to know and understand in order to thrive. One of the first things to recognize is that most successful entrepreneurs make mistakes along the way and learn from their challenges and failures. Some of the common mistakes made by new business owners involve choosing the wrong people, not understanding technology, poor pricing and marketing strategies, and not having a good attorney. How comfortable are you with your knowledge in all of these areas and how they relate to your business?
Picking the wrong people for your team. This is one of the most common and costliest mistakes made by small business owners. Oftentimes new business owners hire based on existing relationships (with their inherent assumptions), or they hire for what they think they can afford. The more important considerations when building your team is to identify if your employees share your core values and believe in the mission of your business. Have you identified what these are and communicated them to your staff? Another determination would be whether or not your team members will perform well under stress. It is a new business, after all. “In the absence of a clear vision, people tend to re-create their past.” –James Newton
Basing pricing on “the marketplace”. Many new business owners make assumptions that their pricing should be the same as their competitors, or double their cost of goods. They may not have identified all the costs and time involved in providing their service or goods. The true measure of pricing is what a customer perceives as the value of the good or service, so pricing based on differentiating your product value, or carefully illustrating the value from the costs and time involved, can impact your profit. Watch this TED talk and consider your pricing strategy: http://www.youtube.com/watch?v=u4ZoJKF_VuA. “People don’t buy what you do. They buy why you do it.” –Simon Sinek
Having the right attorney. Although this goes back to choosing the right people to have on your team, there is something very essential to having the right attorney if you want to succeed in your new business. Unless you are an attorney, and familiar with contract law, business law, and employment law, chances are you do not understand all aspects of the law. Choosing the right attorney involves finding an attorney who understands your business and can offer guidance. Because the costs of not having proper legal knowledge can be expensive, this is an area where you don’t want to skimp. It might cost you your business. “Do you know the difference between education and experience? Education is when you read the fine print; experience is what you get when you don’t.” –Pete Seeger
Source: 6 Common Mistakes People Make When Starting a Business by Lorie A. Parch, April 17, 2014. Retrieved on April 21, 2014 from http://www.entrepreneur.com/article/232240