1. Trying to manage everything alone
Entrepreneurs have a tendency to want to try and do everything themselves. This is because they are passionate about their business and want to make sure that the quality of services provided by their business is up to scratch. The problem is if you try to manage everything yourself, you may actually find that the quality of the products or services you offer lowers. This will be down to the fact that you do not have enough time to spend on each of your business tasks. If the quality of your work is poor, you are not going to make a good impression on customers and will struggle to make your business work.
Whilst you may find it difficult to trust other people with your business and therefore find delegation an issue, there will come a point when you find that you are in over your head. Do not be afraid to delegate tasks. Depending on how your business is going, you can either choose to take on a member of staff or the more beneficial option would be to outsource the work to a virtual office company.
Start by outsourcing small admin tasks, so you can get a better idea of their abilities, whilst freeing up your time to concentrate on core business activities. Once they have proved their worth, you will have the confidence to outsource other work, helping to improve your new business’s productivity levels. To read more helpful ideas for managing your time effectively, take a look at this extensive business start up guide.
2. Renting space you do not need
Despite the fact that many people run their companies from home today, some new business owners still think that in order to run a successful business they need to be based in a city centre location. Renting an office is an expensive and often unnecessary expense. Not only do you have to pay rent, but also account for the costs of overheads and things like cleaning services. If your business does not work out or you struggle to make money to start with, it is unlikely that you are going to be able to pay your rent. If you have signed a lease for a number of months, it is likely that you will have to pay the rent until the lease runs out, leaving you in a very difficult situation.
The solution to this problem is to start off by running your business from home. According to business consultant Barry Moltz, who contributed to this article on Forbes about small business mistakes, small businesses should actually be embracing their size, rather than being ashamed of it.
If you are worried about people knowing where you live or that your business will be perceived as unprofessional, you may want to consider utilising the services of a virtual office. A virtual office company will provide you with a prestigious city-based business address, so you can create the right impression on your customers. They will also provide a mail forwarding service so that no one has to know where you really operate from. Customers will automatically associate you with the other successful businesses operating from your virtual office location and will be more likely to want to work with you and recommend you to others. This will help you widen your customer base and achieve higher profits.
3. Spending too much money when you first start up
Another common mistake that new businesses make is spending too much money when they first start up. Many people think that they need to rent an office, buy expensive equipment and invest in excessive marketing materials in order to succeed. When in actual fact it is not about spending money but budgeting carefully and making the most of what you do have. Remember every penny you spend on something unnecessary for your business will be cutting into any profit you make.
One of the most common areas new businesses spend a lot of money on when they first start up is IT equipment. They think that having the latest equipment will make their business better. Although having up-to-date IT software and equipment will help you to run your company more efficiently, there is a better way to go about obtaining it. Rather than buying it outright, you may want to consider working with a cloud provider offering software as a service. By doing this you will simply have to pay a small monthly fee to use their software via the cloud and will always have access to the latest updates. Many cloud providers also offer security packages and data storage, which will save you from having to buy expensive security software and run costly data centres.
4. Hiring employees they do not need
Whist we have said it is a mistake to try and do everything yourself, many new businesses will find that it is not cost effective to hire staff in-house. When new businesses hire employees they do not need, they end up having to fork out money for their salaries, employee benefits and training, as well as rent out an office for them to work in. If it was a boom in business that made you hire employees, you may find that it is a mistake, especially if soon after you experience a quiet period, as you will still have to pay them even if you have little to no work for them to do.
If you feel that you could benefit from having an extra pair of hands to help you run your business, it is highly recommended that you outsource the work to a virtual office company. These companies provide services such as call taking, mail forwarding and other general admin tasks. They will be able to take care of some of the basic tasks on your behalf, freeing up your time so you can concentrate on other more profitable business tasks. If you require additional help in areas such as marketing or accounting, you will need to look for a specialist virtual office that has experienced marketing executives and accountants that will be able to help you.
The benefit of outsourcing the work to a virtual office is that you will only pay a small monthly fee for the services they provide. This will work out much more cost effective than hiring full time staff. If your business experiences a quiet period and there is little work to do, your virtual assistants will simply work for another client and you will not have to pay them a penny.
5. Failing to keep on top of finances
Whereas some business owners’ strengths lie in marketing, others have a passion for sales. If there is one thing that all business owners need to have an understanding of it is finance. When they first start up, many new business owners get so carried away with the various goings-on that they fail to keep on top of their finances. If you are unaware of how your business is performing financially, how do you know if your ideas are actually working or whether your products and services are profitable?
If your strength does not lie in numbers, we highly recommend outsourcing your accounting work. Your finances are something that has to be one hundred per cent accurate. Not only will you rely on them to tell you how your business is performing, but you will also need them for tax purposes. Outsource the work to a professional accountant and you can have the peace of mind that you are not going to go bust overnight.
Aaron Hopkins is a professional writer.
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