7 Mistakes First-Time Business Owners Make — and 7 Ways to Avoid Them
Starting a business is an exhilarating endeavor that combines the thrill of a roller coaster with the tension of tiptoeing through a minefield. First-time business owners will undoubtedly make mistakes when wading the waters of entrepreneurship, but many can be avoided by knowing what to look for.
1. Free-Range Intellectual Property
Animal activists rightly argue that chickens should be allowed to roam free. Unfortunately, many people allow the same thing to happen with intellectual property. By failing to lock down IPs, patents and trademarks, another company could take hold of your primary source of income. Always file for patents and trademarks, copyright your intellectual property and ensure all your paperwork is properly stored.
2. Hiring Employees Too Quickly
Hiring bad employees can be far more costly than most people realize. A bad employee not only performs below the optimum level, but also lowers morale and productivity across the board. While the need to bring on more help may be dire, take the time to properly vet all new hires and put them on a trial period.
3. Failure to Balance Cash Flow
Cash flow versus profit is a difficult balancing act. While profit tends to be the gauge of success, making $3,000 profit does little to help the company when it won’t be received for 45 or 60 days. Ensuring a steady injection of cash into the bank is just as important, which is why major purchases should be put on hold until funds are sufficient.
4. One-Time Impressions
A customer’s lifetime value is far more important than any single purchase. Take the time to engage customers and win their loyalty. If your product or service is not engaging customers, then find a way to pique their interest. Offer special deals and gather email addresses. Reaching customers after the initial purchase is essential.
5. Waiting for Perfect
Nothing in your business will ever be perfect. While you should act when the time is right, you should learn to distinguish between poor conditions and when they are sufficient to move your business forward.
6. Low Marketing Budgets
Marketing is everything, and without a proper budget, your business will not succeed. Place enough emphasis on increasing brand awareness and getting in front of potential customers to ensure the growth of your company.
7. Letting Ego Rule
You mau feel like the king of the world once your business begins to generate revenue. While there is no harm is being proud of your accomplishments, making decisions based on that pride can be fatal to a business. Allow your metrics and rationale to guide your hand, not your confidence.
HB Hot Rods and Hogs was started by Ed Syer in the back of his auto repair shop in Huntington Beach where Ed was building