4 Common Mistakes When Starting Your Own Business | How to Prevent These Mistakes?

Starting your own business is an exciting yet risky process. An ill-planned, unprepared beginning can result in wasted time, energy, and investment resources, leading to the failure of your venture. In fact, a significant portion of newly established businesses cease operations within the first year. This is due to some mistakes. As a master, in this week's blog post, we've discussed the common mistakes entrepreneurs, especially those starting their first company, make and how you can avoid these mistakes.

1. Inadequate or Incomplete Market Research

Many entrepreneurs fall in love with their business idea and start with the notion of 'this will definitely sell.' But the reality might be different than expected. Starting without knowing whether your chosen product or service meets a real need in the market increases the risk of failure due to lack of demand. If you do not thoroughly analyze your target audience, competitors, price perception, and potential customer expectations, there is always a risk of incorrect positioning.

To prevent this, you need to define your target audience and the market before starting. Knowing competitors who sell the same product and service or address a similar need, and shaping your pricing, product or service features, and marketing strategies based on market data helps.

2. Not Having a Realistic Business Plan and Financial Planning

Some entrepreneurs set out with 'I have an idea, so let's start' without any plan. This is a common mistake. If you start without clearly calculating the initial costs, operational expenses, cash flow, and expected revenue, you might face capital and liquidity issues at the beginning. If points like income-expense, profit-loss, cash flow, growth plan are not clear, the sustainability of the business is at risk.

To prevent this situation, a detailed business plan should be prepared before starting work: Goals, income-expense projection, initial capital, expected cash flow, marketing budget... Being cautious in financial projections and planning according to mid-conservative scenarios rather than optimistic predictions is best. If necessary, it is among the wisest solutions to get external support from an accountant or expert. 

3. Starting with Optimistic Estimates

In newly established businesses, optimistic estimates like 'we will make X amount of sales in the first year' or 'we will grow by X in 6 months' are made, but they are not realistic. This can disrupt cash flow. For example, hiring too many staff, taking on large expenses, making decisions to expand rapidly create financial problems at an early stage. Focusing on profitability instead of sales volume or customer numbers can lead to loss scenarios.

Therefore, it is important to keep your target realistic, gradual, and flexible. It is necessary to monitor not only sales volume but also costs, expenses, cash flow, and profit-loss analyses for profitability. Growth should not be rushed. Expansion occurs step by step once the business infrastructure, operational capacity, customer satisfaction, and marketing plan are fully established.

4. Underestimating Marketing, Customer/Market Needs, Value Proposition, and Pricing

If pricing and value proposition are not clear, it is difficult to succeed without reaching the right audience. No matter how good your product or service quality is, selling is not easy if potential customers do not know you. Incorrect pricing can disrupt the income-expense balance. Single-type, general or marketing and branding costs aimed at everyone are obstacles to reaching the target audience.

The first thing you need to do is create a strong value proposition that covers who you are and what your product or service is. Defining the target audience clearly, making market segmentation, and then planning your marketing message and channel after knowing your customer should be the next step. Pricing should be shaped by both cost and profit balance as well as market perception and competition data. 

You're Safe with Üstad When Starting Your Own Business!

All these mistakes can be overcome with proper planning, realistic evaluations, and a systematic approach. However, walking this path alone is often challenging. Üstad is a digital accounting and finance platform that stands by you throughout the entire company formation process. From company establishment to tax and accounting processes; it allows you to manage all your operations from invoices to payroll, declaration tracking to reporting through a single panel. Thus, you save time, avoid mistakes, and progress your business smoothly.