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Common Startup Mistakes

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


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.

 

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  • Currently 0.0/5 Stars.
Magdalena Zettl  |  March 17, 2014
Interesting.
  • Currently 4.0/5 Stars.
Lanre Kila  |  October 24, 2013
  • Currently 3.0/5 Stars.
Gbemisola Esho  |  March 02, 2011
  • Currently 4.0/5 Stars.
Ogo Maduewesi, Surulere , Nigeria  |  November 23, 2010
Wish I had read this before jumping into Incorporating too quickly, its indeed a huge mistake, I thank God I had goog guides that it didnt burn off my fingers completely.<br/>Glad to find this here, I have said this to people over and over to people 'No matter how much research and preparation you do, you will make mistakes when you start a business'.<br/><br/>Thank you EDS for this gift
  • Currently 3.0/5 Stars.
Tomisa Oluwole-Gideons, Lagos, Nigeria  |  December 28, 2009
personally, he is 50% correct, i completely disagree with INCOPORATING TOO QUICKLY AS A COMMON MISTAKE, for on the other hand it adds to the REQUIRED confidence tostart up, except if moonlighting only.
  • Currently 3.0/5 Stars.
PIUS JAMES, Lagos, Nigeria  |  September 15, 2009

 

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