If you are preparing to set into the business world as an entrepreneur, it is an exciting time, and following your dream is an important element of the process. While startups sometimes create their own path in the market, this does not mean that they are invulnerable to making mistakes and experiencing failures before they even get a chance to prove themselves. If you are in the driver seat of a startup, the experienced New York business attorneys at Ferlito Law Group are well positioned to help you recognize the startup mistakes to avoid from the outset and to help you make the most of your business venture. Consider the following 10 startup mistakes to avoid as you being your exciting entrepreneurial journey. Consider visiting with our of experienced business attorneys to help ensure your legal and financial rights are protected.
#1 – Ignoring The Odds
The United States Bureau of Labor and Statistics reports that approximately 20 percent of all businesses fail within the first two years of opening their doors and that only about half remain in operation after the five-year mark. It is important to understand these facts before you formally establish your company. While it is important to realistically consider your possibility of success, this statistic also shows that 80% of all business succeed in the first two years, and that half do remain open after the five-year mark.
#2 – Failing To Create a Business Plan
Having a great idea is not the same as having a business plan. Without an effective plan, a business owner has no established plan regarding the trajectory of their business. Business Plan basics should include all the following (in accordance with your careful calculations):
- How much you anticipate your business will cost to operate
- How much revenue you expect your business to generate
- Your target audience and how much you anticipate they will purchase in terms of goods or services
Consider visiting with an experienced business attorney at Ferlito Law Group to help you create your business plan and all of your necessary corporate governance documents.
#3 – Ignoring Your Target Audience
It is important to understand the market basics for whatever industry you are entering and for the customers it serves. If you ignore the matter of your target audience, it makes it more difficult to check your progress against that specific target audience and to guide your startup forward toward success. The dedicated New York business attorneys at Ferlito Law Group can help you identify your target audience, the startup mistakes to avoid, and how best to harness the power of your business’s resulting forward motion.
#4 – Failing to Examine the Details
When you begin your business, it can feel overwhelming. Every business owner must carefully examine all of the legal, financial and marketing aspects of a business on a continual basis. By implementing a daily, weekly, monthly, and quarterly checklist of tasks that need to be performed, you can help to set the stage for success.
#5 – Failing to Legally Protect Your Business Assets
New York State requires that all business formally do the following:
- Register your business
- Choose the appropriate business entity
Ensuring that all of your required paperwork protects your legal and financial assets is imperative. Consider visiting with a business attorney at Ferlito Law Group before you make these important decisions.
#6 – Failing to Delegate
Even very modest businesses require an astronomical amount of work, and there are certain tasks, such as those related to accounting and legal, that tend to require professional guidance. No business owner is an island, so ensure that you establish the assistance you need in terms of all the following:
- Hiring employees
- Professional legal counsel
- Professional accounting and tax services
Consider visiting with an experienced business attorney to help answer your questions on how to delegate tasks efficiently in such a way that protects your legal and financial rights.
#7 – Seek Investors Carefully
The initial investors of a business startup company represent much more than just financial backing, which is obviously critical in its own right. Your early investors take a leap of faith that is predicated on you and your idea, and if they are only on board to turn a quick and tidy profit – not to help you nurture your startup’s success – they are not the right investors for you. Make sure that you do your due diligence regarding any and all investors, and make sure that they share your vision for your company’s goals.
#8 – Failure to Create Contracts
Many new business owners are hesitant to create contracts, however, contracts help to keep strong business relationships moving in the right direction and help to address any issues that arise if any of these relationships become problematic. Rather than avoiding the creation of contracts, simply review each contract with your business attorney prior to signing on the dotted line. Remember, contracts exist to protect all parties and ensure that the expectations and requirements of all parties are clear.
#9 – Failing to Staff Appropriately
Most companies need employees or independent contractors to help run the business. However, you should hire employees because they are a good fit and a good investment – not simply because you need employees. For example, before you hire someone on as a full-time employee, consider hiring him or her out on a part-time basis. Small businesses can often be run effectively and efficiently with part-time staff, virtual staff, independent contractors and/or subcontractors, which helps you ease into taking on staffing obligations slowly and with careful intention.
#10 – Failing to Understand Your Financials
If you are starting a business, and it is only natural to be excited, optimistic, and raring to go all at once. New business owners, however, often underestimate their early financial needs. It is important to recognize that it is unrealistic not to plan for setbacks – and that being financially prepared to address them as they arise is paramount. Consider visiting with other small business owners, a tax expert, and a qualified business attorney to clearly understand your financials before you make any decisions regarding your startup business.
Consult with an Experienced New York Business Attorney
One of the most critical mistakes that many startup business owners make is failing to visit with an experienced business attorney. The dedicated New York business attorneys at Ferlito Law Group are specifically qualified at helping clients like you recognize the startup mistakes to avoid – and at helping them guide their businesses move rapidly toward success. Please do not hesitate to contact our legal team and schedule an appointment today.