When an entrepreneur is preparing to launch his first business venture, he works hard to avoid making critical mistakes. But there have been plenty of instances where business rookies made blunders that almost cost them their financial futures. If you are a business rookie, then you can smooth out your startup by learning from the mistakes of others.
Not Delivering on Promises
Image via Flickr by hz536n/George Thomas
Business rookies think that making big promises is the best way to get people interested in a new business venture. But if you do not deliver on those promises, then it could cost you dearly. In 1958, Ford marketed the Edsel as the “futuristic automobile of the future.” The anticipation was so heavy that people waited weeks just to see the new design. When it was finally released, the Edsel did not deliver on any of the marketing hype that preceded it, and it cost Ford money and severely damaged the company’s reputation.
Not Scouting the Competition
In the 1970′s, Betamax and VHS were competing to see which would be the home video format of choice. Sony was pushing the Betamax, but the bulky Betamax machines and limited tape recording time were no match for JVC’s VHS format. Sony made the mistake of not doing a comprehensive analysis of the competition before releasing its product. It is a mistake that too many rookie business owners make, and it can stop their business cold.
When you incorporate your business, it becomes its own legal entity and offers you protection from legal action. If you are not incorporated, then a customer could sue your company, and you could lose your home, your car and everything else. If you are incorporated, then you have a level of protection against legal action that can help to protect your personal assets from exposure.
Not Getting Good Money Advice
New business owners have a lot on their minds, and they need to focus on their business to make good decisions. To try to save money, rookie business owners will often neglect getting financial advice from experts because they think it is too expensive. The truth is that good financial advice can pay for itself. You can follow Fisher Investments on Twitter @FisherInvestUK to get good money advice that you can use.
Not Making Wise Decisions
The DeLorean Motor Company started building luxury cars in 1980, and their cars quickly became sought after status symbols. In 1983, founder John DeLorean was recorded telling a government informant that he thought a suitcase full of cocaine was “as good as gold,” and everything changed. It was later revealed that entrapment charges against the officers conducting the investigation allowed DeLorean to go free, but the damage was done. As a business rookie, you need to always think about your business, and make the right decisions for your company and your own future.
A business rookie is always learning important business lessons that should help him become a better business professional. But it is always a good idea to try to avoid making the big rookie mistakes that could cost you the business you have built, and everything you own.