Don’t make these mistakes when starting your small business

Nobody sets out to open a small business with the expectation that it will be unsuccessful. Unfortunately, however, nearly 20% of businesses do go under within a year. To avoid being a part of that 20% and instead joining the successful 80%, keep the following mistakes in mind so you don't make them yourself.

Failing to do market research
Although an idea may seem like a great idea to you and those friends or family you discuss it with, that doesn't necessarily mean that it's going to appeal to the masses. To see whether your business is something that people will be willing to spend their money on, conducting market research is vital. The Small Business Administration recommends looking into demand, market size, pricing, market saturation and location before getting started. You can use surveys, focus groups and interviews, or even online questionnaires to get more information.

Having a written agreement
If you're a sole proprietor, this may not apply. However, it happens all too often to people who start businesses with friends or family that things seem rosy in the beginning as you ride the adrenaline rush of getting started, but as things take off and profits roll in, things can get complicated. No matter how close you are to your business partner, it's always advised to put together some sort of contract or written agreement early on.

Hiring the wrong people
Your employees can really make or break your business. If you open a coffee shop, for example, and the baristas are lazy or rude, you'll lose customers faster than you can put on a new pot. Or if you have a tech company, and hire someone unqualified, you're unlikely to make progress. When starting a business, it can be tempting to hire people because they're a friend of a friend, or because they're willing to do it for cheap. But this is your livelihood you're talking about. The good thing is that in the same way the wrong employees can hinder your business, the right employees can make it a success.

Undervaluing your product or service
When you're first starting out, it's common to have a touch of imposter syndrome. You may think you should charge less and get patrons in the door or clients on your list. It may not be a bad idea to come up with a grand-opening promotion or discount, however when it comes to your pricing model it's so important to make sure you're recognizing your value. It's difficult to change your pricing model down the line and make things more expensive, so this requires a great deal of thought and effort (and confidence!) before you make any decisions.

Not having proper legal representation
You'll want to be ready for anything as your company evolves. Get in touch with the Law Offices of Donald W. Hudspeth, P.C., today to learn more about how to set your business up for success.

Categorised in: Starting a Business in Arizona

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