As accountants, we have helped many small businesses and startups, so we know a thing or two about the mistakes that get made over and over by various entrepreneurs who are new to the world of business.
Here are our top five tips on how to avoid mistakes if you are starting up your own business.
Use your time wisely
We only have so much time before we die, so our time is precious. That means it should not be wasted by not using it wisely.
Every time you enter your office, you should do so with the intention to do something productive. If you don’t work your business will not make money and so it will not succeed.
It helps to have a plan for what you are going to do each day rather than just making it up as you go along.
Don’t start too big
Many people who start up their own business do so because they have big dreams, whether they do it because they want to get rich, become respected, or just have more control over their own lives.
But you shouldn’t try to start the business too big.
A business that grows too quickly is at risk of not being able to cover the costs of its increased orders, so it can be just as bad as not growing quickly enough. You also shouldn’t take out loans that are bigger than you actually know what to do with.
Many of the successful businesses which exist today started very modestly, making very little money stretch as far as possible.
Don’t fear failure too much
Even though you shouldn’t try to start the business too big, it doesn’t mean you shouldn’t take risks. In fact, taking risks is integral to growing your business into a success.
If you don’t take calculated risks from time to time your business will stagnate because it keeps doing the same things over and over.
So don’t fear the failure that could occur through taking risks – your business will never grow otherwise.
You need to be the one who makes decisions
If you are moving from employment to starting your own business, you are probably used to having loads of decisions being made for you.
However, as an entrepreneur and business owner, it’s you who needs to make all of the decisions, including everything from who to hire to which suppliers to use.
You can ask other people for advice, but it’s you who needs to have the final say.
If you can’t be decisive, your business will likely suffer.
Know that costs will be higher than you are expecting
It doesn’t matter how scrupulously you think you were in the planning stages, your business costs will almost certainly be higher than you expected.
There are the obvious things such as employee wages and salaries and office rent, but there are always other costs that pop up. Also, when you do your calculations, make sure you remember to include your own salary.
Shoaib Aslam is the co-founder of Pearl Chartered Accountants, a UK-based chartered accountancy firm that has multiple locations across London. They are experts in helping startups and established businesses with all aspects of growth, strategy, scaling up, accounting and tax planning.