Common Mistakes That Can End a Start Up
Doug Hutton talks tips for new businesses
If your start up is in its infancy, or you are thinking about dipping your toe into the new business sphere, Doug Hutton talks tips to avoid common mistakes that might lead your dream business to bankruptcy.
Starting a new business is exciting and full of possibilities, however, start ups come with their own set of risks. Here we share some of the common mistakes seen when working with businesses to help you avoid the same pitfalls.
The business universe has the symbiotic relationship between start-ups and entrepreneurs as part of its make up, but nowadays start ups can be one of the riskiest bets; will yours be the unicorn that everyone is looking for or the flash in the pan that goes bankrupt before it has got off the ground?
Not Having A Specific Business Plan
You may have a great idea, but sadly this is not synonymous with having a good product or being able to get it out to the right market. Having a plan involves projections of what you are expecting your company to achieve; set projections for revenue and profits and a plan for turning your dream into a reality and making it profitable. Its vital to have a plan in mind on paper so you can revert back to it and execute it to the letter, to drive success for your business.
Prioritising Friendship and Not the Talent
The majority of start ups are formed between friends; a sharing of skills and a joint vision of how to make an idea a reality. This can turn negative when the share of work is not balanced, or some members fail to add creativity, talent or work to the project. A common error with start ups is to put friendship before business; if you are finding a friend and business partner is not contributing for the betterment of your business, it is time to exclude them to ensure your business grows.
Not Respecting Your Budget
Budgets are really important to the running and success of your business; spending more than you can afford is one of the largest factors in new business failure. There are many ways to optimise your budget, like designating a home space for working or using co-spaces to save pennies. Remember, large companies all started this way and modest beginnings can be the key to business growth.
Ensure A Strong Board in Place That Can Solve Potential Disputes
A huge mistake a lot of start ups face is board governance. A robust board panel is important, especially if a start up is founded by two or three young people as there will be issues and serious events that can take place- exiting co founders or insolvency for example – so that the company has the tools to deal with an issue rather than it being the end of the start up.
Poor Team Management and Recruitment
Recruitment may also play a part in the downfall of a start up. Its imperative to find people with the right vision and attitude, ad values that match those of your brand. Your management style must encourage your team and ensure that your staff are a well oiled machine to help your start up be as successful as possible.
Its important to make sure that you hire a wealth of experience and not just the most qualified; skills play an equal role and having a team with complimentary skills will boost your business forward.
Legal Challenges
Finally, legal blindness can be a disaster in your start up. I the UK there are a plethora of legal norms that are vital to being a legit company. If legal matters aren’t your skill then it can be a headache. But not giving it the consideration it deserves can result in sleepless nights, permanent damage to reputation and huge financial implications.
Failure to comply with UK business legislation can be devastating, so hire people who can ensure you have checked off everything needed and can ensure you are always in business with a steady cashflow throughout the year.
Final Words
The word ‘risk’ has changed the world in recent years. However, evaluating all the scenarios in favour of your start up will lead you more surely to success. It is pertinent to mention here that creating your own start up from the ground up is bound to present some serious trial and errors, but you do not have to do it all alone.
Get in touch with Limelight Accountancy to get the best services you could hope for when building your business from scratch! We help new businesses get into the groove and get their accounts straightened out to ensure compliance at all ends.
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