Jasmine Birtles
Your money-making expert. Financial journalist, TV and radio personality.
Secure Your Startup’s Future: Common Pitfalls To Avoid While Starting A Business
Moneymagpie Team
7th Jan 2025
Majority of Gen Z in the UK aspire to become entrepreneurs as they want to turn their ideas into something real, and have a better work-life balance at the same time. According to a recent survey, 75 percent of Gen Z– those born between 1996 and 2012– want to be their own boss, and 77 percent believe that they can successfully launch and run a business. Being well-versed in social media, as well as being quick to adopt new technologies may help them to navigate the online aspects of a business with ease. However, any entrepreneur knows that running a business presents many challenges, and anyone who wants to sell a product or a service could face bankruptcy, competitive risks, and reputational risks at any given time.
If you’re thinking of starting a business and you’re not prepared to handle these roadblocks, there’s a chance that all that hard work that you put into your venture will go down the drain. Knowing the pitfalls to avoid, and making a solid plan to deal with problems, can help you secure your startup’s future. Here are the most common mistakes to avoid while starting your business.
Failing to Register Your Business
So you got the word out about your business, and your family and friends are genuinely excited about it. But did you remember to register it before doing anything else? Let’s face it– doing all the initial paperwork to make your business legal isn’t fun, and it can be confusing at times. However, failing to register your venture can end in major repercussions, and you could incur hefty fines and other legal penalties. Even if you think that you won’t be earning much in your first year of operations, keep in mind that only those who are earning less than £1,000 a year are not required to register their business. If you’re making more than that though, then you’ll need to register your venture to be protected from liabilities, get tax benefits and legal benefits, and be recognised as a legitimate business.
You can register your business as an LLC, a partnership, or as a sole trader. However, if you want your personal assets to be protected, it’s recommended to register as an LLC. It offers a flexible business structure, as well as legal protection due to other people’s mistakes. If you need help to navigate the process of registering your business, consider using LLC formation services, and save money on fees by availing Northwest Registered Agent discount. This way, you’ll get peace of mind knowing that this aspect of your startup is being handled professionally, and you get to focus on other things that need your immediate attention.
Not Having a Business Plan
Many novice entrepreneurs fail to prepare a business plan, not knowing that it’s essential for their staff and investors to understand their vision and goals for the company. According to a study, about 41 percent of entrepreneurs don’t have a business plan, and only 21 percent had a detailed, formal business plan. While you don’t necessarily have to have an extensive or elaborate plan to launch and run your business, having one can help since it enables you to prepare for contingencies, and it can guide your team to make good decisions. To write a basic business plan, you’ll need to put down on paper your executive summary, descriptions of your products or services, market analysis, your marketing strategy, and financial plans and projections.
Avoiding Help
Young startup founders often prefer to figure things out by themselves, believing that any advice that they’ll get from more seasoned entrepreneurs may not be applicable to what they’re trying to achieve. However, hiring a consultant or getting a mentor can be beneficial for your venture since they can offer constructive feedback, and they can also be a good sounding board when you need to make important decisions. They can also offer advice while you create a business plan, and help you to be more comfortable in your role as a business leader.
When looking for a mentor, don’t just choose someone because they’re a successful entrepreneur. Although you’ll certainly learn a lot from them, you also need someone who has a positive attitude, and they should be willing to sit down with you to have regular conversations. They also need to have an open mind and treat you as an equal. At the same time, your mentor should be honest with you, and they should be able to guide you back to the right path if they notice that you’re veering off course. Lastly, they should be trustworthy, have good listening skills, and be genuinely passionate about their business.
Launching and running a startup isn’t easy, and every entrepreneur is likely to make one or several mistakes down the line. Some mistakes can be preventable though, so keep these tips in mind to secure your business and help it thrive in the long run.
Disclaimer: MoneyMagpie is not a licensed financial advisor and therefore information found here including opinions, commentary, suggestions or strategies are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence.
Subscribe
Login
0 Comments
