In my role as a business adviser, here are some of the common mistakes I see people making when they start or are running a business:
- Going in partnership with a friend or family. Most people who don't have the capital required to start a business normally approach friends and/or family and ask them to start a business jointly. Most people who have gone down this road soon realize what a big mistake this was. Barely a few months go by and they start having disagreements about the direction of the business, work load and profit sharing. If you want to be in business, go solo!
- Having family as employees. At the start of business when you want to keep costs low, it may sound like a good idea to ask a friend or family member to be an employee of the business but in the long run it doesn't work out. Even if you have to pay them more, hire unrelated people in your business for their skills not their relationship with you.
- Setting up the wrong business structure. Setting up a wrong business structure at the start can cost you hundreds of thousand of dollar in extra taxes over the life of the business. There are various business structures available out there from sole traders to partnerships, from trusts to companies and depending on your circumstances any one or combinations of a few would suit you. Don't ask your business friends what structure they have got and replicate it, go to an expert and let them analyse your situation and recommend whats best for you.
- Trying to do everything by yourself. Don't waste your time in doing things like designing your own website or trying to design your business cards. If you do, you will soon realize that you would be wasting a lot of your time on these activities rather than using time on developing and growing your business.There are professionals out there who specialize in these and other services that you may require to start up and run a business, use them.
- Wasting your time on monitoring competitors. Many businesses waste a lot of time trying to monitor what their competitors are doing and try to beat them. If you really want to succeed then you must differentiate yourself from the competitors.The best way to do this is by ignoring what they are doing and running your own business in your own way and not be influenced by the competitors.
Suresh Rajani is
the Business Leader at Tax First - an
accounting and business advisory firm located in Adelaide, South
Australia.
