Any entrepreneur can attest that the beginning is always the hardest. You come up with a business idea, look for market opportunities, generate funds, register your business, and the real rollercoaster ride only begins when you commence operations. As in life, committing mistakes is an inevitable part of starting and managing a business. Not all mistakes can be fatal to your business, but most can cause lost opportunities and momentum. Here are some of the most common pitfalls fledgling entrepreneurs fall into and a few tips to help you prevent or cushion the blow.
1. They do not have business and revenue plan in place. There is more to starting a business than simply having an idea. Many small businesses fail early in the game because they do not have a game plan. What’s your advantage against competitors? Where will you get financial support? What’s the profile of your target market? Writing a business plan will help you answer critical questions about your business and allow you to address them before setting up. It doesn’t need to be exhaustive but make sure to include market strategy and competition analysis. Read: 5 Elements of a Good Business Plan
2. They unnecessarily overspend on setting-up costs and inventory. Profit doesn’t come easy especially in new businesses. A common mistake of first-time entrepreneurs is excessively spending on items that the business can do without. Remember, there is no definite timeline when you will get your investment back or when you start to profit. Spend only on what your business requires to become fully operational. List every item you need and stick to it.
3. They do not implement a proper record-keeping process. If you don’t track your business transactions, there’s a big chance you will overlook expenses and overspend. Maintaining a healthy cash flow starts from monitoring the money that goes in and out of your business. Take note of all your transactions to make better financial decisions. Set a proper bookkeeping process or hire a professional if you can’t do it on your own.
4. They neglect legal and tax obligations. The saying “prevention is better than cure” can be applied in many aspects of running a business. If you’re a first-time entrepreneur, make it a priority to understand your legal and tax obligations. Don’t hesitate to ask for assistance and advice from an expert when you need it. Avoid paying for penalties or dealing with legal problems by educating yourself and soliciting support. Try to find out if there are any tax incentives or tax exemption schemes that you can take advantage of. For example, Singapore implements a Tax Exemption Scheme for New Start-ups.
5. They do not seek feedback from customers. Feedback is everything when you are starting out, especially when it comes to the most valuable asset of your business—your customers. Make sure to ask for their thoughts on your product or service. When you give customers an avenue to channel their comments, complaints, and suggestions, you not only demonstrate value in their opinion but also your commitment to innovate. Gauge the effectiveness of your marketing strategy, find out possible opportunities to grow, form actionable insights on what you can improve in your product or service.
6. They do not hire the right people. You will want a strong foundation for your business and hiring people who share your vision for the business plays an important role. When hiring for your business, look at the value your prospective hires can put into your business. Let them know your goals and find out how they can provide more value to your business. There is no guarantee that all your hires will live up to your expectations so make sure to take the time and effort to get to know the people who will work for you before making a decision. Lastly, do not hire more employees than your business needs.
7. They do not have a support system. The first thing you need to understand is that you will not have everything figured out all at once. Build a strong support system—a team with a complimentary set of skills, a partner that supports your vision, business advisors, a mentor and just about anyone who can help you grow as a better entrepreneur. Seek expert feedback and advice especially when it comes to improving your product or service. The more you understand, the better and more informed your business decisions will be.
Should you be interested in starting a business in Singapore, we offer cost-efficient company incorporation, secretarial, accounting and tax services that would suit your business needs. As a first-time entrepreneur, it will be ideal to take advantage of our Singapore Company Incorporation Package as we will provide you with FREE 1 Year Secretarial Service. Avoid neglecting your tax and accounting obligations by seeking assistance from experts. Get in touch with us so you can schedule a FREE consultation with one of our specialists.