The Top 5 Mistakes Small Businesses Make in Their First Year

5 Mistakes Small Businesses Make in Their First Year

It’s become common knowledge that being an entrepreneur is hard. Being a successful entrepreneur is damn near impossible. But what is it exactly that separates the failures from the triumphs? Below are the top 5 mistakes that small businesses make within their first year of operation.

1. Limited Idea

Turns out that idea you thought was a diamond in the rough is really just cubic zirconium  While you may be passionate about it and you believe in the product, that doesn’t mean everyone else will. Make sure your idea has a niche market, but more importantly that it has room to expand. Execution of your idea is the next crucial step. Making smart decisions and knowing when to take risks is essential to getting a leg up on the competition. But if you’re the type of person who has a hard time picking out a shirt to wear in the morning, you might want to reconsider pursuing this type of business venture.

2. Competition

So maybe you’re not the first person to think of selling gluten-free, vegan, cupcakes but that doesn’t mean there’s no hope for you in that niche market. Research is key in finding out if your product is already out there and booming with no room for a start up company. But do not despair, there are always options. Simply dig a little deeper. What kind of product can I give people that they don’t already have? Or if they have it, how can I make it better? Challenge yourself and you’ll be surprised at what you can come up with…like gluten-free, vegan, cupcakes for dogs!

3. Lack of Experience:

We’ve all heard that story about a friend of a friend who quit his big corporate job to start his own company totally out of left field, with barely any experience, and is happier than ever. Sorry to break it to you folks, but those stories are the very rare exception to the rule. The fact of the matter is, you need to know what you’re doing! Just because you frequent the mall doesn’t mean you can become a clothing designer overnight. If you don’t have any professional experience, but you’re sure your idea is a winner, find someone that’s willing to help you! That way you can balance your passion with a partner that will gladly help you out with the experience side of things.

[framed_box width=”0″ height=”0″]Related Topic: 3 Ways To Avoid A Product Recall [/framed_box]

4. Website

Here’s the thing, any monkey with a computer and $20 bucks for a domain name can make a website. Chances are, it’s going to be one page, poorly designed, and ridiculous looking. And that’s not what you want. What you want is something easy to use, organized, and polished. That’s why investing in a sit-down meeting with an experienced web developer and planning out what it is that you want your website to do is well worth the cost. A really good developer can include social media, e-commerce, and any other customized functions you want. The great thing about it is that after the website is designed, you can run it yourself! It’s one of the things that most small business owners just don’t put time and effort into because they don’t think it makes a big difference, but nearly every statistic out there tells us different. So have a professional looking website, it’ll make your life a whole lot easier.

5. Investors

This is probably the hardest part about starting a business from the ground up. You’re going to need money and chances are a loan from the bank isn’t going to cover all of your expenses. We’re talking about reeling in some investors. First of all, make it clear that you mean business, and that means having all your paperwork in order. Copyrights, trademarks, patents, get it all under control. Investors want to know that their money is going to good use and you need to literally show them that you’ve got your head together. Second of all, be realistic. You can’t just expect people to give you their money and be OK with it if it doesn’t work out. You have to prove that the pro’s outweigh the con’s. Lay out your business plan for your potential investors, take them through it step by step with everything from marketing to your industry contacts, make them feel like a part of the process, and let them make a decision for themselves. There’s nothing worse than being pressured into handing over large amounts of cash that you may never see again.