Starting your own business can seem like a daunting task. There are many aspects involved, and one of the major reasons why people opt-out of starting a business is the risk factor. At the end of the day, getting your business off the ground in the beginning is the hardest part. After the ball is rolling, things get easier – but getting there may be an ordeal.
Reza Shojaei, the founder of a multinational company, Value Marketing, tells about the 5 biggest mistakes many startups make in the beginning, and how to avoid them.
The biggest mistakes to avoid when starting a company
Shojaei owns Value Marketing, a multinational company that has two major brands. Both of them are related to the iGaming market and they offer free resources to gamers, and cover areas such as gaming, Indian lottery, guides, and so on. However, even Shojaei had to start from the bottom.
Proper planning is half the battle
Before you can start a business, you have to have a plan. In fact, without a proper business plan, you cannot expect to succeed. A comprehensive business plan includes information about the company, for instance, the goals, mission, target audience, and competition analysis, among other things.
In the business plan, you should also have a well-planned section for marketing and financial projections.
- Numbers do not lie. Planning is half the battle, and making sure all numbers add up is a must. You cannot expect to have a successful business, if the financial plan does not make sense. You can have the best business idea and something that would really help people, but it needs to make sense financially, Shojai says.
Simply put, when you fail to plan, you plan to fail. The first thing you have to remember is to plan properly, and to make sure that the business works on paper, before putting it into action.
You have to have cushion in the bank account
In most business models, you will not make a profit during the first month or two. In fact, you might not even make profits in the first six months or a year, depending on the scope of your business. Each business should have a few months worth of cash in the bank account as a cushion. Especially when starting out, it can he hard to project the amount of sales you will get in the beginning. Thus, making realistic cash flow projections can be hard.
- No matter the size of your business, you should have some cushion in your bank account. Some business owners save up the money before starting a business, whereas others have investors, or they get a loan from a bank, Shojaei advises.
Put effort into hiring the right people
To make your business profitable, you have to save money and make sure you will not spend recklessly. However, saving money from salaries is not the place. Hiring the right people and taking care of them can be the thin line between a successful and an unsuccessful business.
- Your employees are often the contact point between yourself and the customer. You have to put effort into hiring talented and motivated people, and make sure they get the proper training. When your employees are happy, it will directly reflect into your business, Shojaei says.
Investing money in hiring the right people and training them properly is vital for your business. You want to ensure that your business has good employees who are motivated and who represent your company in the best possible way.
Not utilizing all possible marketing channels can cost money
In today’s world, there are many marketing channels that can benefit your business. For instance, digital marketing is big. It gives a possibility to reach millions of people online, and for some businesses, it can be very useful. Taking an advantage of all possible marketing channels gets your business out there and in front of as many people as possible.
Simply put, if you do not utilize all the available channels, you may risk leaving money on the table.
Not taking advantage of grants
Many governments issue grants and other stipends to startup businesses to help them get off the ground. Though these grants may not be much, anything can help a startup business. Sometimes, you can apply for these grants, stipends, or loans through your government or other agency. Or, you can contact your bank and ask what they have to offer for startups.
Banks, for instance, might offer credit cards, loans, or other ways to make sure your business has the cash flow it needs. However, always keep in mind that when taking a loan for your company, you should deem if it is necessary first. After all, it needs to be paid back and any extra cost can be damaging to a startup.