10 pitfalls you need to avoid - but you’ll fail

1. Being self-employed means being independent

Life is no picnic for starting entrepreneurs. You have to work hard, be creative, immune to stress, deal with risks, be critical and have an eye for opportunities. There’s much more to take into account than if you were an employee. Entrepreneurs are doers. You really need to get that into your head.

2. Don’t be a headless chicken

If you start ill-prepared you’ll make lots of mistakes. Starting a business can take anywhere between 3 to 12 months. Before you get started it’s best to carry out a feasibility study for yourself and your project. Ask yourself a few logical questions: who is the competition? What are the standard profit margins in my sector? Who are my customers? What is my overhead? What major investments do I have to make? It’s a good idea to set aside some time to get a clear overview of the situation.

3. Starting with limited resources? A capital mistake!

Be aware of the costs you’ll have to make and make sure you have adequate resources. One in five starters go bankrupt because they lack sufficient financial resources. The golden rule is that, ideally, your start-up capital should consist of 1/3 of your own funds and 2/3 of debt capital (loan, money lenders, ...) Therefore you should make an estimate of the expected costs and turnover. This will create a clear image of the capital you need to start up your business.

4. Too few customers

No customers are coming in, the customer portfolio isn’t growing. This is one of the things that spell trouble for a starting entrepreneur. The basic rule is: no single customer should account for more than 20% of your turnover. You need a diverse customer portfolio to keep your business healthy.

5. Administrative hassles

Yep, managing your administration is like eating. You can’t do without it or your business is doomed to failure. Companies that lose sight of this quickly get into trouble. The golden rule is: order and structure.

6. Without guidance it will be tough going

Getting advice will help your business grow. There’s more to it than an accountant and a bank. You have to make optimum use of them because many starting entrepreneurs have a lack of legal, accounting and tax expertise. A good accountant will not only take care of your books but will also coach you to help your business grow. Banks also have advisors to help new entrepreneurs.

7. Bye bye friends, hello long working days

Especially in the beginning this means long hours and a lot of hard work.Very often starters underestimate the impact of their new business on their social lives. Most likely you will have to make sacrifices. That’s why it’s very important to talk this through with your partner and make transparent arrangements.

8. Elevated costs

Long before you’ve sold a single product you’ll be spending money like water. Your overhead will be considerable at first. Here the golden rule is: try to keep your overhead in check in the beginning.

9. Please keep your feet firmly planted on the ground

Of course you’re passionate about your own product or service. Still, it’s important to stay level-headed. Not everyone will share your enthusiasm for your product or service. Our golden rule: pitch your idea to as many people from different backgrounds as you can find.

10. Not knowing the sector is not knowing the dangers

You are an entrepreneur and you want to expand into a new market. If you know that market you’re likely to succeed. However, if you don’t know it then you will fail, like so many before you. Here’s our final golden tip: if you want to expand, stay true to your core business, your basic activities. What you need to avoid at all costs is fragmenting your activities over multiple sectors.

So there you go, these are 10 common pitfalls. Take our advice to heart and you will defuse 10 potential bombs as you launch your business.

Source: UNIZO
Starters line (free) 02 21 22 677