While starting your own business comes with plenty of advantages there are also a number of pitfalls you'll need to navigate. Here three entrepreneurs advise on how to avoid common mistakes
Believing that a vision alone will build your business
While a good idea is a great start it doesn't make a successful business. In order to set up on your own and make a real go of it you'll need a solid business strategy.
'Be a fantastic realist and accept that your current vision might not be the vision that is needed in the end,' says Georgie Nightingall, founder of Trigger Conversations.
Feeling dissatisfied and unconnected with the conversations she was having Georgie started to run conversation events in London to awaken curiosity, inspire aliveness and remind people to simply be real. The first event had 21 attendees, the second 45 and third 60. Two years on, Trigger has engineered more than 4,000 stimulating and meaningful conversations with over 1,200 people at 55 events and workshops for individuals and corporates.
'Build consistent feedback into your product or service and get ready to accept this feedback like you would a Christmas present. Be prepared to proactively respond to this new insight,' adds Georgie.
Disregarding your customer
Making a difference to the lives of others requires you to focus on maximising the quality of your offering rather than its profitability - failing to provide a great service can be fatal. This is because self-employed individuals initially lack the reputational leeway afforded to established businesses. Respect your customers, their opinions and their product feedback.
Essentially your customers are the ones who believe in your product enough to buy it and use it so problems should be fixed efficiently and distinctively. By listening to and appreciating your customers' needs you'll have a stronger product in the long run.
'Concentrate on the user as much as the product. You need to grow both side by side; otherwise you'll finish one and be left wanting the other,' says Steph Newport Booth, one of three founders of GoSweat, a service which makes finding and booking fitness activities simple and easy.
Failing to understand your industry
Knowing your product or service but failing to understand the market it will be sold in could lead to you wasting both time and money. Possessing strong knowledge of your industry is therefore imperative.
One solution is to set up your business in an industry that you already know well. Thorough understanding of your industry extends to any specialist legislation that may affect your business.
Succumbing to imposter syndrome
During the course of setting up a business one mistake that people commonly make is giving in to feelings of self-doubt. You'll question your ability to get the venture off the ground, to manage the workload and make a profit. Don't let these feelings distract you from your goal.
'Take action by starting before you're ready, because the truth is you'll never be ready. Of course, committing to action may seem daunting when you don't feel completely equipped, but that's where the fun is,' says Georgie.
'Also, don't forget to regularly reflect on your achievements, no matter how big or small. They'll give you evidence and confirmation of how far you've come.'
Saying yes when you're time stretched
'Your time is so precious when starting a business, use it wisely,' advises Vicky Simmonds, founder of Mean Mail, which creates cards with brutally honest and funny messages.
'When starting out you might get messages from brands or companies wanting to collaborate - only say yes when it's a 'hell yes' and you have the time to commit to the opportunity.
'Don't get distracted by projects that take you away from your core work or dilute your mission. Get used to saying no (for now) and focus on what you really need to do.'
Listening to family and friends too much
When starting your own business having a good support network is vital and family and friends usually form a big part of this.
'Entrepreneurialism requires both risk and fast, on-the-go learning. If you're surrounded by people who don't understand the culture, then it's likely that you'll feel as if you're toeing the knife edge alone,' explains Georgie.
However, having family and friends to talk to when you've had a bad day is one thing, but try whenever possible to get a wider, more unbiased opinion on your products and business activities.
'Family and friends will either be too nice or too critical,' explains Steph. 'You have to ask yourself, 'are they my target market?' If they aren't ask someone impartial for their take on things.'
'Seek support from people pursuing similar projects or passions. Remember, you're never alone. There are always mentors. You just need to find them,' adds Georgie.
Being financially savvy early on is particularly important, and overspending is another business mistake you'll want to avoid. Keep in mind that all initial expenditure must be recouped.
'If you don't have a stable pot to build your business from and live off at the same time, then life can become quite stressful,' says Georgie.
'Either ensure you have a consistent income from another job or have enough savings to live off. Also, when financial planning remember everything always takes twice as long as you expect.'
'Cashflow is everything,' explains Vicky. 'Avoid spending money as much as you can.'
'Poor cashflow management is the reason why 82% of businesses fail within the first five years of starting. Keep your business overheads to a minimum, only purchase necessities and hold off getting an office/studio/team until you can actually afford it - never base financial business decisions on speculative numbers when you're starting out as you've got nothing to prove that it works,' she adds.
Once you've had a brilliant idea you'll be eager to turn it into reality and get your business started. It's true that successful self-employment requires dedication and hard work but your drive to make it work coupled with a never ending to do list can lead to a heavy dose of burnout.
'It sounds so simple, but prioritise your health first. Eat well and exercise. Secondly, separate your work from your home life by joining a co-working space or finding a café. Lastly, take days off to go and obsess over something else,' advises Georgie.
Find out more
- Learn more about self-employment and COVID-19.
- Discover if self-employment is right for you.
- Take a look at how to write a successful business plan.