10 Mistakes To Avoid When Starting A Business
 Any time you start a business, there are a wealth of decisions to be made. Also, it seems like everyone you know will have some choice advice to give you.
How can you tell which bits of wisdom are worth paying attention to and which ones are an invitation to disaster?
The answer is, learn from other's mistakes! So, without further ado, let's take a look at the top ten mistakes that people make when starting businesses.
1. Too Much Spent on Promotional Materials
When people start a new business, one of the most common mistakes they tend to make is spending far too much of their often meager start up capital on promotional materials.
This is totally understandable, of course. It's an exciting thing to have posters and business cards printed up. It can make even the smallest business seem more “official”. But the fact is, those materials are largely useless to the new business.
What's vastly more important is generating word of mouth through quality service, and establishing a strong base of loyal repeat customers. Then, when the thrust of your marketing becomes more about expanding rather than developing a foundation, you can start using promotional materials of this sort.
2. Too Big, Too Quick
The new business that sees a lot of initial interest is in a dangerous territory. There are lots of mistakes that can be made by growing too quickly. For instance, a business that sees a surge in customers over its first few weeks of operation might feel the need to want to take each and every one of them on as clients because they don't want to develop a reputation for “turning people away”.
The problem is that they don't yet have the resources to manage so many clients, so most of them end up getting sub-par service, which hurts in the long run. Further, a rush of clients up front can artificially inflate expectations for future business to an unrealistic level. It's best to maintain a level head throughout your first few months of business and develop a solid foundation.
3. Promote Results Rather than Credentials
A lot of first time business owners feel the need to boast about the credentials that they might hold. Again, this is understandable behavior, but not necessarily advisable. Just consider your own experience as a consumer.
How often have you been swayed by hearing about a company's credentials, or the school that they attended? Conversely, how often have you been swayed by looking at a real sample of a company's work?
The truth is that while you might have worked hard for your credentials and they're something that you're very proud of, they probably just don't mean very much to the rest of the world. Therefore, when you advertise, you should focus on the results that you're capable of.
Actively demonstrating your abilities is infinitely more persuasive than simply asserting that you have those abilities.
4. Focusing on the Contract Rather than the Relationship
For many who are new to business, they think that the end goal of relations is “signing on the dotted line”. They've learned to view a signed contract as an end in itself, a prize that assures them that everything is going to go right from here on out.
It just doesn't work that way! Contracts can be broken for any number of reasons, and they will be if they aren't backed up by solid professional relationships.
Therefore, as you develop your client base, focus more on establishing actual trusting relationships with your clients rather than forcing them to sign contracts as quickly as possible.
5. Trying to Look Too “Professional”
You have to market your business for what it really is. If you're a small time family owned business, it makes no sense to market yourself as a franchise, or a large chain. What is there to gain from doing so? It will simply cause customers to expect things out of you that you're incapable of delivering.
Besides, there's no reason to put on the aires of being more “professional” than you really are – small businesses have their own unique and personal charm that many people value much more highly than the so called assurance that they receive from larger businesses. Market your strengths, don't invent them.
6. Dishonesty About Business Size
An offshoot of the above mistake, many new business owners often try to make their business appear larger than it is.
This can include any number of things from referring to your one-person operation as “we” in promotional materials to outright referring to staff that don't exist, or telling potential clients that you'll “pencil them in” to a schedule that you know is actually blank.
When you project the image of being a larger, busier company than you really are, you aren't doing yourself any favors. No one is going to decide to go with you simply because of your size; instead, they will just expect more out of you.
They'll expect faster turnaround than you can deliver, and when they find out the truth about your operations, they'll just feel cheated. Don't risk it.
7. Misidentifying Your Niche
There's often a great deal of disparity between what a business owner feels to be their niche and what their niche actually turns out to be.
This tends to happen when they fall too much in love with the product they're selling and want to revolve their business around it whether it's successful or not.
Remember that while your business is something that you should enjoy, it's also an investment and it's going to bring you a lot more long term enjoyment if it's successful.
Therefore, constantly analyze your sales to see what your strong points and your niche really are, and then push them as much as possible. Go with the flow of business, and don't try to force the square peg into the round hole.
8. Not Having a Plan
It goes without saying almost that a business without a strong plan is going to crash before it can ever really get off the ground. The purpose of having a plan is that it enables you to have a central tenet around which all of your business decisions can revolve.
Without a plan, you might make individual decisions that are good in isolation, but which contradict and work against one another when seen as part of the bigger picture. The only way to ensure that you're constantly moving ahead in a way that keeps the future in mind is to develop a long term plan and strategy, and stick to it.
9. Spending Beyond Your Means
This one should be obvious, but it still ranks highly on this list because it's something that new business owners still do each and every day. Excited to see their business taking off, many new owners will anticipate profits much sooner than they will actually happen.
As a result, they start spending money. They start expanding the business and making investments that they simply can't handle, whether it's opening a second location or hiring too many staff.
Whatever the case, for at least the first year of operations you should expect to make no profit at all. If you keep this simple tenet in mind, it will allow you to develop a strong foundation for future growth, and keep you out of tight spots that could sink your entire venture.
10. Not Focusing on Long Term Equity
 The number one mistake that most people make when starting a new business is that they fail to focus on building long term equity.
The reality of running a business is that you will very likely one day sell that business. When you do, you hope to make a profit at it.
Therefore, it's not enough to just earn a profit with your business and call it successful. You have to establish strong equity in your business by creating a solid foundation, and developing the kinds of systems that will make your business attractive to potential future buyers. Keep the future buyer in mind from the very beginning, and one day you can expect to come out on top.
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