A key difference between a successful business and one that fails often comes down to how well the company and owners learn from their errors or whether they just keep making the same mistakes over and over again.
Below are some everyday business mistakes that many companies have made and should be avoided.
A Poor Plan Leads to a Poor Foundation
A business plan is a necessary business document and one that lays out all the key details about your business, product or services, your business goals and sets a timeframe for when you expect to achieve those business goals and milestones.
It is your foundation and not having a business plan or not conducting in-depth research may put your company at risk of making avoidable business mistakes.
Key elements of a business plan include:
- Company description
- Executive summary
- Organisation and management
- Define legal structure
- Company goals and aspirations
- Market analysis
- Competitor analysis
- Marketing and sales strategies
- Financial projections
- Service or product line
- A time frame for when you expect to achieve your business goals
- Strategy for growth
Not Seeking Legal Advice
From choosing the correct business structure and obtaining an Australian Business Number (ABN) to registering your business name and obtaining all necessary permits and licenses, starting a new business involves a myriad of considerations and duties.
It also comes with numerous legal obligations and responsibilities, which is why it may be better to seek legal advice from a commercial lawyer than risk making any mistakes.
Commercial lawyers, such as those at Barristers Adelaide, may provide legal services that include:
- Establishing and maintaining business compliance
- Registering your new business with ASIC
- Registering your business name
- Applying for and obtaining relevant licenses and permits
- Registering for and obtaining trade marks
- Drafting and negotiating various contracts and agreements
- Managing business mergers, acquisitions or sales
- Reviewing commercial lease terms and conditions
Lack of Funding and Poor Financial Advice
One of the biggest challenges new business owners and startups face is securing funding, managing finances, setting budgets and forecasting cash flow.
A common business mistake new business owners and startups make is not seeking out financial advice or business or business advisory services.
Many new companies also often fail to accurately estimate the amount of capital required to get their business off the ground and running.
Not Registering For Taxes
As individuals, most of us are aware that we have to pay taxes and deal with our tax returns each year.
Many of us also know that if we don’t meet our tax obligations, we may get ourselves into hot water and face hefty fines.
Even if we try and do the right thing, taxes can be confusing, tedious, time-consuming and errors can easily be made.
And, business owners are not exempt from making these same errors or facing difficulties with lodging their business tax returns or registering for the appropriate taxes.
Not Seeking Expert Help
As a new business owner, you may be determined to figure everything out on your own or want to keep costs low by doing everything yourself.While dedication and hard work are necessary attributes in a business owner, not seeking the right advice or not having access to the right resources may lead to issues or doing things incorrectly. The above-mentioned mistakes can be costly and detrimental to a new business. The Australian Bureau of Statistics reports that up to 20 per cent of new businesses fall within the first 12 months of operation, while as many as 60 percent of new businesses will fail in the first three years.