There are a number of common business mistakes people make when starting up a new endeavour—every new business owner will make some mistakes, but there are a few common business mistakes that you can be on the lookout to avoid. Here are the four biggest.
1. Not Having A Business Plan
When you are starting a new business, your best friend is your business plan. Successful businesses don’t happen by accident, or by luck—they succeed because people plan for them to succeed. You need to write a business plan when you are starting your business, and you need to re-visit it, check how your progress is going, and continue doing course corrections.
2. Grow At The Right Pace For You
You want your business to succeed and grow (and make more money for you), but you have to be careful about not growing too fast, too. Businesses that grow too fast can have big problems:
keeping up with increased demand for product,
needing to hire too many people (rather than the right people), or
needing a much bigger (and more expensive) place of business.
Controlled growth is almost always more successful in the long run.
3. Don’t Hire Too Many People Too Soon
Be careful about hiring too many people too quickly. There might be many things that you, the business owner, can handle yourself, or you might be better off hiring a part-time employee or sub-contractor instead of a full-time employee before you’re quite ready for one. Employees can be very expensive—beyond their salary, there are other expenses you need to pay (Canada Pension Plan and Employment Insurance payments are two universal costs of employees).
4. But Also, Get Good People On Your Professional Team
New business owners can get bogged down with trying to do everything themselves, either to try to save money or because no one else (in their opinion) understands the business and what needs to be done like they do. This attitude only gets you so far—there are some things that business owners should probably hire an outside person to take care of, like accounting, taxes, and legal issues. Shaw & Associates would love to sit down with you and talk about your daily bookkeeping needs, as well as financial planning and taxes.
Take a look at this video for more ideas on common business mistakes.
Contact Shaw & Associates Chartered Accountants for accounting help you can count on. One complimentary meeting with us will put you and your business on a more profitable and positive path.