Plenty of people have dreams of starting their own business, whether it's to get out of a current job or to create something incredible. However, if you're not careful, you could make a few easy mistakes that might result in your startup falling apart before it has a chance to succeed. Be on the lookout for these common mistakes when you're creating your own business or side hustle.
Getting A Friend Involved
While many people think that it will help to have a close friend or family member owning the business with you, that could end in financial disaster. Statistics show that up to 70% of all business partnerships fail, and when that happens, businesses can crumble. Feel free to network with friends and family to find a team to help you; just be sure to remain the sole owner of your business to avoid social and financial difficulty.
Not Investing In Marketing
While money might be tight while starting your side hustle or business, sometimes frugality can stunt your revenue growth. Brand awareness can be one of the most important things during the first stages of your business, and most organic methods of marketing take quite some time to bear fruit. Investing in outbound digital marketing (e.g. paid ads) can be a great way to start generating sales and growing your brand from the start. These efforts can show great returns, with most businesses seeing a 200% return on Google Ads, on average. Outside of the digital world, if you have a brick and mortar store, it could be worth it to invest in your storefront, to increase traffic. For instance, upgrading to an LED sign could score you an 83% increase in sales. If you play it right, investing money into your business can pay dividends in the long run.
Ignoring The Competition
You might think of your startup as a one-of-a-kind idea, however, it's likely that there's at least one other business out there trying to do what you're doing. Do plenty of research when you're first starting out and know who your competitors are, even if they're not providing the exact same product or service as you. See what they do well and try to learn from mistakes they've made previously; this will help you avoid falling into the same traps that they did.
When starting your business, it can be easy to neglect your accounting while focusing on growing your revenue. However, staying on top of your taxes can help save you for years to come. IRS audits can come at any point and time, and if you haven't properly filed your taxes, it can come to haunt you many years later. The IRS can audit your business's tax return up to three years after you file, and can collect taxes that you might owe for up to 10 years. When revenue starts rolling in for your business, it's a good idea to invest in either an accounting software, freelancer, or firm.
Not Having A Plan B
As a startup, it's likely you'll run into some financial struggles somewhere along the way. Stay realistic about your chances for success, and have a gameplan in place for when you eventually run into an issue with budgeting and funding. It's tempting to think you'll be able to avoid this simply by virtue of what your product or service is. However, it's far better to have a plan and not need to use it than to run into trouble and not know what to do.
Starting up a business of your own is intimidating, but it's a goal that many young entrepreneurs have. Do your best to avoid these beginner mistakes that many entrepreneurs make, and you'll find yourself in a position to succeed and thrive.