Com­mon startup mis­takes

Chronicle (Zimbabwe) - - Business Chronicle -

FOR most peo­ple, start­ing a busi­ness is an ex­cit­ing time dur­ing which they are in­vig­o­rated by the pos­si­bil­ity of suc­cess and the fun of tack­ling new chal­lenges. It is also a time to make lots of mis­takes! Many of the mis­takes entrepreneurs make dur­ing the start-up phase can be avoided. One of the best ways to steer clear of foibles is to talk to es­tab­lished busi­ness own­ers about what they learned dur­ing the process. Ask your at­tor­ney or ac­coun­tant for re­fer­rals to busi­ness own­ers who have rel­e­vant ex­pe­ri­ence and at­tend trade as­so­ci­a­tion meet­ings and talk to peo­ple in the in­dus­try you are en­ter­ing.

No mat­ter how much re­search and prepa­ra­tion you do, you will make mis­takes when you start a busi­ness, but the com­mon er­rors listed here may help you avoid a few. Com­mon mis­takes in­clude:

In­cor­po­rat­ing too quickly The first step for many peo­ple when they launch a busi­ness is to file with the state of­fice of in­cor­po­ra­tion. While in­cor­po­rat­ing is an ap­pro­pri­ate step for many busi­nesses, it pays to wait un­til your busi­ness idea is well formed be­fore tak­ing the plunge. The rea­son: the con­cept of your busi­ness and there­fore the name is likely to change dur­ing the first few months of oper­a­tion.

Not re­search­ing the mar­ket A fre­quently over­looked com­po­nent of busi­ness start up is de­ter­min­ing whether the tar­get mar­ket for your prod­uct or ser­vice will buy from you. The best way to de­rive the an­swer to this ques­tion is to ask them. Ar­range to speak to as many of your po­ten­tial cus­tomers as pos­si­ble. Ques­tions to ask in­clude: Would you buy my prod­uct or ser­vice? Where do you cur­rently ob­tain this prod­uct or ser­vice? How much would you be will­ing to pay for it? What do you like/ dis­like about your cur­rent provider? Where would you look for this prod­uct or ser­vice when you need it?

Want­ing to over-use an at­tor­ney At­tor­neys’ hourly fees add up ex­tremely quickly and newly-minted busi­ness own­ers are of­ten shocked by their first few le­gal bills. The temp­ta­tion when you start is to in­volve your at­tor­ney in all as­pects of your busi­ness for coun­sel and draft­ing of doc­u­ments. Many busi­ness own­ers quickly learn that it pays to do your own re­search, draft your own doc­u­ments, and call on the ex­per­tise of your at­tor­ney to re­fine your work.

Spend­ing too much money on of­fice space and dec­o­ra­tions

A nice of­fice and great com­puter equip­ment make many entrepreneurs feel as though their dream of en­trepreneurism is com­ing true. While one of the plea­sures of launch­ing a busi­ness is set­ting up an of­fice that you are proud of, ex­pen­sive trap­pings have put many busi­nesses out of busi­ness be­fore they got off the ground.—www.sme­toolkit.org.

Adapted from con­tent ex­cerpted from the Amer­i­can Ex­press® OPEN Small Busi­ness Net­work

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