When you’re ready to launch your first business, there are many risks that come along with it. As a newcomer, you are exposed to dangers that you may not be aware of as a result of your lack of business know-how and experience.
Approximately 20% of US businesses fail within their first year. Reasons for their collapse are diverse and include entrepreneur burnout, workforce problems, and financial issues. Additionally, timing can also be a crucial part of your success or failure, as businesses that launched shortly before the pandemic never had the opportunity to build up sufficient momentum to survive.
Nevertheless, some mistakes associated with a lack of business expertise can make it harder to keep your venture afloat.
As a newcomer in business, you are especially vulnerable to cyber crimes. Cyber criminals prefer to target small businesses because they tend to have weaker security systems. On the other hand, SMBs wrongly believe that they are invaluable targets for criminals and, as a consequence, fail to take the necessary precautions to protect themselves.
Unfortunately, hackers can cause a lot of damage, including loss of sensitive data, loss of revenue, and loss of reputation.
So, it is necessary to protect your business from day one and invest in a robust cybersecurity system and strategy. This can also include cyber insurance, but you want to prioritize expert IT support, multi-factor authentication, and mobile device management first.
Let’s be realistic. As a newcomer to the business community, you are an easy target asd you lack connection. As such, criminals may attempt to take advantage and offer deals that are too good to be true. As a rule of thumb, you should scrutinize every contract before you agree to sign, including asking and clarifying everything before agreeing.
Ideally, you want to reach out to legal experts who can provide the support you need. This can include same day services for mobile notaries who can guarantee that the people signing contracts are who they say they are, or help you retrieve important documents in no time.
Not Planning Your Business Finances
When starting a new business, many entrepreneurs get excited about launching their product or service to the market. While this enthusiasm is necessary, it can also be dangerous if not tempered with a solid financial plan.
Indeed, starting a business comes at a cost. As an entrepreneur, you are likely to face expenses before you can start earning revenue. As a result, failing to plan your finances so you can afford to invest in your venture means you could quickly run out of funds and put the entire operation at risk. Most businesses need approximately 2 years to reach profitability.
Therefore, it is crucial to map out your revenue streams, expenses, and projected profits as accurately as possible so your venture can remain sustainable until it can make a profit and pays for itself. It is worth working closely with a professional accountant or business planner who can advise on the best funding strategy for growth and the appropriate financial pace.
Not being a born leader or not being cut for entrepreneurial stress are some of the key concerns of new business owners. However, many face challenges long before they can develop their entrepreneur strategy. You can certainly learn to manage a business in the field. But you need to give yourself the chance to learn by protecting your venture first.