We all know the formula to create your business. Protect your idea, file patents, choose your legal form, write a business plan, do a market study, and get started. And yet, this formula is far from the realities of how most entrepreneurs handle starting and operating a business. Here are five mistakes entrepreneurs make and how to avoid them.
Do not talk about your idea and isolate yourself
Most entrepreneurs are afraid of being robbed of their idea. They isolate themselves and hide in a cave until the release of their product or service. Go out and sell your product or service as soon as possible, even when you are in prototype mode. When you sell, you get a concrete market study with customers who will make a relevant return. This return will allow you to improve your service or product in a much more adapted way than what you do alone.
As for the risk of being stolen the idea, know that the idea in a project is not worth much if it is nothing at all. The project you will build depends on your network, your way of doing things, and your vision, not just your idea. Two entrepreneurs will not have the same project from the same idea. The protection of the idea is not a priority when you launch your project.
Want to choose your legal status too soon
Choosing your legal status is a good thing. It helps to optimize your business. But in the early stages of creating an activity, choosing one’s status is often too hasty. We often see entrepreneurs who are not yet familiar with their market and who already want to register. Your company’s legal status is essential; therefore, you need to know a lot more about the business before choosing the proper status.
Make incorrect financial forecasts
Understand that an investor does not put money on a file but on a project they believe. If projecting a business’s financials that has yet to launch, it cannot be easy to be accurate. You will have to use other businesses to give an accurate forecast of the finances to potential investors. If the business is already operating, it will be easier to forecast and add to the business plan.
When we calculate financials over the year, it will be the consequence of each customer that we will be looking for day after day and who will have spent some money with us. In other words, we must anticipate all his year in a precise way. When setting your goals, it’s important to remember all these moves and at what point the business is profitable.
Carry out a classic market study
Market studies may not always be the right way to discover how your business will do or if the public will accept your products. In most classic market studies, the response will be positive. However, once the products or services are launched, there can be a different response. While you can use classic market studies to help you get some feedback, you need to keep the costs low, and you should be sure to have other ways to test your product or service.
Not creating a business plan
Every business new or already in operation should have a current business plan. The plan should be adjusted at regular intervals of the business. A business plan should include an executive summary, company objectives, market analysis, sales analysis, marketing strategy, and a financial plan. The business plan is the map to the business and is essential to let investors know what you are about and what the potential profits should be. The biggest mistake most business owners make is failing to create a business plan at all.
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