Business success stories like Tish Taylor and Adrienne Houghton don’t just happen overnight. Veteran entrepreneurs go through a fair amount of trial-and-error before getting things right. And thanks to these trailblazers, today’s startups are more aware of the common mistakes that get in the way of growth.
But what are these mistakes and how can your startup avoid them?
Not Doing Enough Market Research
An inability to satisfy a market need is easily one of the most common reasons why startups fail. This all-too-common path to failure can be avoided through extensive market research.
The Chron’s guide to research for startups lists the different market research methods you can take to cover your bases, ensure that you’re satisfying actual market needs, and be able to pivot as necessary. Start your research online, as government agency websites, entrepreneurial blogs, and digital business magazines all have corresponding websites from which you can source valuable market information.
This can give you a wider and more defined purview of not just the markets and industries you want to break into but also insights into your competition. The web is where you can find and work with nonprofit organizations like The Glowfidence Foundation which provides practical info and resources for budding entrepreneurs.
You can also contact your local community colleges and universities for assistance, as their business departments are likely to already have research programs designed to help startups. You should stay on top of any pertinent news that relates to your product, service, or technology. Staying up to date with current events can help you pivot strategies in line with emerging new trends.
Finally, feel free to contact local or state government agencies for assistance. The authorities can provide you with key info in terms of not just rules and regulations, but also networking opportunities for registered businesses. Market research will take up a big chunk of your time and effort. However, if you do it properly, you can significantly decrease the levels of risk involved with any current and future business decisions.
Starting with the Wrong Business Structure
Your business structure will certainly influence your startup’s growth. In a nutshell, the four basic business structures are: sole proprietorships, partnerships, corporations, and limited liability companies (LLCs).
Sole proprietorships come with the least initial costs and requirements to form, but do not offer legal liability protection. This means that your startup’s future debts and liabilities can be tied to your personal assets, as owner and businesses are treated as a single legal entity in a sole proprietorship.
Meanwhile, in partnerships, the legal liability is spread across general partners, while limited partners are not as liable and only considered as investors. The IRS’s guide to creating a partnership indicates the need to file an annual information return – this is for reporting purposes only as partners are taxed at an individual level.
Corporations on the other hand are ‘double-taxed’ through federal and state business taxes and individual taxation. At the same time, corporations are formed for the legal protection it affords shareholders, which means that your personal assets can’t be seized for your corporation’s liabilities.
And finally, LLCs afford members a limited amount of liability protection – without the double taxation of corporations. A guide to creating an LLC on ZenBusiness details how it is the most flexible structure you can have, as the operating agreement can be used to determine everything from ownership and responsibility percentages to buy-sell procedures for exiting members. These are just the most fundamental things startup founders need to know about organizational structure.
It would be best to hire a business law attorney who can clearly show you the ropes and determine the best choice for your startup.
Letting Emotions Dictate Business Decisions
While startups begin as passion projects, this doesn’t mean that it should let your emotions prevent you from making objective decisions. As important as it is to stay passionate and believe in the business model that you’ve built, it’s equally important to set these passions aside when making difficult decisions. The more you can control your emotions, the better you can weigh up any significant risks that your startup might face. Once you’ve determined your business structure and collated enough research about your target market, it will be easier to set aside your emotions and make more objective decisions that will actually help your startup’s growth.
The post Common Startup Mistakes and How to Avoid Them appeared first on Talking With Tami.
from Talking With Tami https://ift.tt/31IaV82
0 Comments