Do you remember pets.com? At the very least, you probably remember the talking dog-shaped sock puppet that was their spokesperson. That sock puppet was everywhere during the two years pets.com was in business. And then, just a few months after dropping millions on a Super Bowl ad, they were out of business. What happened? Pets.com made one of the most classic business mistakes: they fed into their own hype and ignored the fundamentals of strong businesses. Here are three more mistakes to avoid when starting a business, so you don’t end up blowing your momentum.
Not managing your money. If you aren’t tracking your revenues and expenditures from the very first dollar you spend on your company, you’re not managing your money properly. In order to make sure you can make payroll, you need to know exactly how much money you have, and you need to have contingency plans in place in case you don’t have enough money to cover your expenses. Bankruptcy and insolvency is too often a surprise for most companies. It sneaks up on them, because they are not paying attention to what’s going out and what’s coming in until not enough money is coming in.
Customer service is terrible. Why is Comcast having so much trouble getting new customers? It’s not because fewer and fewer people are watching television (as if that would ever happen). It’s because people have started to hear about how terrible their customer service is. Customers should be your first, second, and last priority. Making them happy is what keeps you profitable, so don’t treat them like they’re expendable. One might be expendable, but once two or three bad reviews of your customer service pop up online, you’re headed for failure. Make excellent customer service a tenant of your business from the moment you open your doors.
You hire the wrong people. It’s tempting to hire your friends and loved ones, but if they don’t actually have the right skills to hack the job, they can be a drain on you and your business. Pick the right people—the ones that have the right skills and the same enthusiasm for the work as you do. Don’t just hire people you like. Hire people who can do the work and do it well.
Starting a business is scary, but avoiding these three mistakes will help you achieve success. Just remember that so long as you properly manage your money, have great customer service, and have excellent people on your team, you are gearing up for success. Of course, there are other elements to starting a successful business, but these 3 elements are essential to keeping your business on course.
What other pitfalls do you think new business owners should avoid in order to keep their business up and running? We would love to hear from you in the comments.