Starting your own company? Take a look at these 5 major, common, and totally avoidable mistakes to make when launching a new business.
These days it seems like everyone’s trying their hand at launching a startup. With high competition in almost every sector, emerging companies should work to distinguish themselves. Mistakes are a given in launching a business, and many will be beneficial in the lesson they teach you. Others, however, can easily be avoided. Take a look at our list of what not to do when launching a business:
1. Not planning
Launching a business is not for the disorganised. A sound business plan is a crucial requirement, particularly when it comes to securing investment. The business plan should cover the company’s long-term objectives, competitors and industry research and a fair amount of numbers. Ensure that your business plan and P&L has room for margins of error and project delays, just in case.
Business plans should have room for other changes, too. If a product isn’t selling, it doesn’t mean it couldn’t with a rebrand. There are many reasons why you may not experience success initially, and it’s worth trying new things like a different marketing tack or exploring ways to quickly refresh a product line.
Work to protect your own interests by carefully considering your business structure, setting up a business bank account and getting proper contracts drawn up by an attorney… or risk paying for it later.
2. Not going mobile
These days every type of business should at least be considering the mobile presence of their company and brand. Over a third of the world’s population now has a smartphone, and in the US mobile-only internet users now exceed desktop-only users.
At the very least, websites should be mobile-friendly (and where possible, accelerated - Google AMP drives traffic and improves SEO), but also to cater to the digital audience businesses of all kinds should be taking steps to implement social media marketing, and even considering launching an app. Apps can work to nurture a consumer base, provide vital analytics, create the image of a ‘lifestyle brand’ and provide opportunities for future growth. Social media further works to market a brand as an innovative thought leader and expand reach - a great Instagram campaign can make the world of difference to a product launch.
3. Choosing friends
Like most man-made things, businesses need people. Who you choose to work with is up to you. Picking trusted partners and employees should be a bit like picking a sports team in school - you can choose your friends, but choosing candidates for their experience and skill will probably be more effective in the long-term.
In addition to this, it’s important to consider your target audience before launching anything. Who are you doing this for? What are their interests, what other similar products do they use, how much money are they willing to spend on something like your product? This will help you to refine products and maximise success, and finding a niche will also provide room for future growth.
4. Not checking for infringement
To avoid any legal damages and PR scandals later on, it’s a good idea to do some research in order to ensure you aren’t stepping on anyone’s toes… that is, infringing on any registered patents and trademarks. Companies like Apple, Samsung, Yahoo and Facebook have all been embroiled in patent wars, but while these companies can handle expensive legal cases (and typically have enough of a patent portfolio to countersue) the same probably cannot be said for your emerging company. It’s a good idea to look into similar patents, including patents for software, that employ similar ideas to yours. There are many search tools for this including Google’s patent search.
As bands from Led Zeppelin to Blink-182 will tell you, this includes the name of your business too. Lest having to rebrand yourself in the early days and explain to customers that you were formerly known under a different name, it’s wise to first do at least a quick Google search to ensure no other companies are registered under the same name. There are specific tools available, like this one to search for available company names in the UK.
5. Cutting costs without managing risks
Finally, you should take care selecting marketing and distribution methods, which whilst not cemented in stone, are time-consuming and expensive to change once established. Outsourcing manufacturing to the far-east is a traditional means of cutting cost, but economists are beginning to wonder whether manufacturing in China is still worth it.
Outsourcing manufacturing brings many risks including IP infringement, particularly true in China. IP Watchdog outlines some key strategies for preventing and handling infringements in China, and you should pay close attention to these in order to protect IP, vital in the digital world where copycats are rampant. Distribution channels, can also bring risks to IP, especially with e-commerce - we profiled how Amazon’s own means of distribution has been corrupted by counterfeiters.
As an emerging business you have the freedom to make decisions, so make sure you make the ones that will protect your products and unique selling points in the long-term. The connected, digital world has driven competition for almost every industry, and because of this a brand’s identity is critical to its success. A brand’s identity is more than a logo; it should communicate held values, aims and future growth. Overlooking the importance of a brand is a guaranteed way to kill a new business - without it, your great idea is no better than a copycat product. With a brand identity, comes a need for a strategic brand protection solution, which will work to safeguard growth.