Mistakes are par for the course when starting a business and can actually help you become a better business owner in the future. Unfortunately, they can also be financial disasters and hurt your pride. By learning from the mistakes of other new business owners who now have established businesses, you can reduce your learning curve and start earning a profit sooner. As experienced financial advisors, Aura Wealth Management would like to share some of the most common mistakes we see clients make with their new business.
Not Enough Funding at the Beginning
Before you even consider serving customers, make sure that you have enough funds available to meet startup costs and other expenses for at least one year, although two years is preferable. If you have no idea where to start, don’t hesitate to schedule a meeting with an Aura advisor. Our team has helped numerous clients before you prepare a realistic budget to meet expenses. If you’re still in doubt, it’s better to overestimate how much you will need than underestimate your business expenses.
Starting a Business without a Plan
It’s understandable that you feel excited about launching your new business. However, doing so without extensive planning is a recipe for disaster. The Small Business Administration (SBA) recommends that anyone considering starting a new business must first create a business plan. You can find information for what to include in your business plan at sba.gov. It even provides different recommendations based on whether you want to write a full business plan or a lean start-up plan that provides a more high-level focus.
Not Understanding Who You Are Selling To
You may want your new business to be all things to all people, but that just isn’t possible. If you hope to succeed, you need to identify the demographics of people most likely to buy your products or services. One way to do this is to conduct market research to understand the interest level in your products or services among those you have identified as potential customers. Another is to study the pricing and customer service strategies of your closest competitors. Discover what does and doesn’t work for these companies and use this as a starting point for how you plan to compete with them.
Overlooking the Importance of Marketing and Advertising
Developing advertisements or running an advertising campaign isn’t cheap, especially when you’re working with a startup budget. Even so, you can’t expect to attract any customers if they don’t know that your new business exists. You can start with a small campaign, measure its effectiveness, and then invest more money in marketing and advertising as your new business grows.
We Can Help You Avoid the Rough Spots
The financial advisors at Aura Wealth Management are available to meet with you as many times as you would like while you get your business up and running. Sometimes just talking out a new idea with someone outside of the company can help you avoid a costly mistake. We look forward to working with you and wish you well on your new business venture.