Setting up a business means often to overcome some potential stumbling blocks. However, some mistakes can be easily avoided by taking certain aspects into account.
Being self-employed and running your own business is the dream of many. Every year a lot of them make their dream a reality. According to the commercial register entries in 2020, around 46,800 companies were founded in Switzerland. About 4.9 percent more than in the previous year. The list of company foundations in 2019 is headed by companies in the service sector with 4,954 new registrations, followed by business and tax consultancies (4,090) and craft sector businesses (3,803).
However, many start-ups fail already in their early stages. All of them mostly for the same reasons. Read now of the ten most common entrepreneurial mistakes briefly summarized here:
1. Inadequate planning and preparation
If one enters the keyword “business creation” in a search engine, the reader is led to believe by the digital vendors that setting up a company is quick and easy. Nevertheless, establishing a business is no child’s play. There is a lot to consider. A business plan is essential to not lose the central idea and goal behind the company launch. A well thought-out and complete business model can also be helpful later when it comes to financing and obtaining funding.
2. Neglected financials
Equity capital, investors, fixed and variable costs. There are many crucial financial topics which can be of specific relevance, not only in the first years of self-employment. As an entrepreneur, it is always important to keep a cool head and maintain the financial overview. Common mistakes are:
- Too little equity
- Inadequate cash planning
- Underestimating current expenses and dynamic costs
- Unawareness of possible subsidies
3. Insufficient marketing
“Do good and make it known!” The same rules apply when founding and managing a company. Nevertheless, the necessity of targeted marketing and communication activities and their positive impact gets underestimated often. A neglect that is not helpful to drive growth and success. Products and services can be excellent, but they are of no use if nobody knows about them.
4. Insufficient controlling
Running a company implies to know what is happening within the organization. What is the current course of business and the financial situation? How high are the investments done and what is overdue? Are we achieving our goals and objectives? When managing daily business routines, active controlling is often neglected. However, planning, managing and regular monitoring of all company areas is of key importance to keep business development on track.
5. Wrong choice of employees and partners
Having the right employees in place is the linchpin of business success. They should be optimally qualified for their tasks and loyal to the company. The same rules apply when choosing business partners.
6. Inaccurate technology and equipment
Using the right equipment and technology is of key importance for smooth daily business management. With the help of suitable tools one can work more efficiently than by using conventional or even outdated methods.
7. Ignore competition
Competitors and market, often both do not receive sufficient attention. A comprehensive market analysis is the necessary solution. In general competition should be continuously monitored to avoid losing market share.
8. Seeking no protective rights
Business ideas, models and products should be protected whenever possible to minimize the chances of copycats and counterfeits.
9. Lose customer focus
There are many things to remember when starting a business. Unfortunately, it happens that one loses sight of the customer focus in the process of building a company. Questions concerning customer needs should always have the first priority and be at the forefront of the entrepreneurial mindset and focus.
10. Bad self-management
All things considered, strategic management of one’s own personal resources is of key importance for success.
These 10 mistakes briefly summarized, explain what needs to be considered when founding and running a business and how to avoid potential pitfalls. Following these recommendations, nothing will stand in the way of becoming a self-employed entrepreneur and a successful founder and manager of your own start-up company.
March 24, 2021
