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There’s no ‘right’ way to start a business, although plenty of entrepreneurs who have earned their stripes will no doubt believe they managed to crack the code. Really, it’s a much more complex combination of instinct, timing, creativity, having a head for numbers, and – yes – a certain amount of luck, too.
There are plenty of notes you want to hit as you grow your business, but there are also plenty of pitfalls to avoid. The ability to know and recognise those pitfalls is part of any good entrepreneur’s skillset, but it’s not necessarily written into their DNA. It’s all a learning process.
The Top 10 Mistakes to Avoid When Starting a UK Business
1. Looking for investment too soon
Most businesses need a solid cash investment to get off the ground. This is particularly true if you need to establish a physical inventory of products in order to start doing business or secure premises for production.
But the real risk here is that you run – in other words, start actively looking for an investor – before you can walk – by that, we mean before you have your business plan, pitch deck, Use of Funds statement and capitalisation table prepared.
If you go in with 100% passion and 0% preparation, investors won’t be interested.
2. Disregarding customer feedback
We’ve all been there, but negative feedback is par for the course – and it’s a growth opportunity, which makes it a positive (in the end)!
3. Not outsourcing
Outsourcing is perfect for SMEs. Your cybersecurity, for instance, is paramount to the success of your business; from the very get-go, you’ll want a robust framework for securing customer data and any other sensitive information. But expertise in this field is costly, and you likely can’t afford to hire a full-timer for the time being.
The same goes for other elements like HR, marketing, and customer service.
4. Not securing legal advice early-on
The growth of a new business is a complicated, busy, and nerve-wracking time. With so much to think about, planning for the very long term and laying those vital foundations for the future can easily get pushed down the list.
This is exactly what corporate solicitors can ensure you avoid – mistakes that will prove costly in the end. From choosing the right business structure to ensuring you’re adhering to commercial law (and not getting roped into any bad agreements with other businesses), they are there to see you through the long storm – and what comes next.
5. Not taking advantage of the tech
These days, there are more opportunities than ever before for businesses to make themselves more efficient and more agile with the help of technology. Don’t let yourself get stuck in the mud.
6. Scaling too quickly
Sharp rises to the top don’t prove sustainable for many businesses. That’s not to say that a time of massive growth doesn’t necessarily mean the business is bound to fail – far from it – but that responding to a period of strong sales and revenue growth by scaling the business is rarely the best course of action.
Remember to balance any decisions against your internal capabilities and the market conditions. Build the business to withstand the long-term, not the short-term successes.
7. Copying a competitor
While there are always good things to learn from a little competitor analysis, make sure your USP remains your key concern. There’s no long-term value in only being able to do exactly what your rival is doing.
8. Going too hard, too fast
As an entrepreneur, it’s too easy to invest every fibre of your being into growing a new business. Your time, your physical and emotional energy, your perseverance, and your relationships can all start to suffer when you’re giving everything to the business.
While it may seem like a worthwhile sacrifice in those early days, don’t underestimate the toll it can take – even for just a few months on the grind.
9. Hiring too fast
Growing a team is a great sign that the business is going places, but hiring too many people in one go is a recipe for disaster. Grow the team at a rate that really serves the business.
10. Paying for office space you don’t need
Remote working can be incredibly effective and great for keeping teams motivated. These days, unless you need it for meeting clients, office space can be an unnecessary expense to a lot of new, growing businesses.