3 Common Startup Mistakes (And How to Avoid Them)
Starting a business is an exciting time for any entrepreneur—but before plowing full-speed ahead and printing up flyers for your grand opening, let’s take a look at a few pitfalls that can entrap the unwary small business so you can make sure not to become mired in them yourself further down the road.

1. Not having a plan
With something as important as starting a business, doesn’t it make sense to do some research and have some sense of where you’re going? After all, if you don’t know where you’re going—if you don’t have a business plan—how will you know when you get there?
Your business plan is your road map—a map to your industry and your position within it, your geographic location, your target market, and your business’s future. It goes where your official formation paperwork does not: deep into your business’s financial projections and expenses, with details on your vendors, corporate officers, customers, even utilities.
Think of this document as a great way to check yourself to make sure you’re considering all aspects of your business; if you just don’t have the information you need to complete each section of your business plan—for example, if you don’t have a clear idea what your expenses for the year are going to be—then you know you need to dig a little deeper into your research before you leap right in.
(For detailed information on how to create your business plan, see our June 2011 post, “What Is a Business Plan?“)
2. Failing to listen to your customers

“If I build it they will come” is not a valid business plan. Too many small business owners began under the premise that they knew what their target market wanted, but failed to heed any of the warning signs that led to their inevitable downfall.
In general, if your customers are giving you feedback on what they’d like to see you doing differently, it’s in your interest to pay attention. If your business provides a few different services, and you’re consistently asked if you can also perform a fourth—why not consider it, if it’s a feasible addition to your repertoire? If you’re a retail outlet, consider adding items that customers have asked for when they purchase your products (think batteries in an electronics store).
A business’s vision and sense of what kind of organization it is is wonderful. But rigidity in the face of a market that knows what it wants from you and consistently isn’t getting can be a dangerous conceit.

3. Forgetting to register your business
Tempting as it may be, you can’t just throw your doors open and start running a business. There are a few different filings that you’ll be responsible for:
- Registering your business (possibly as a corporation, LLC, or DBA)
- Obtaining an EIN (or, in some cases, your SSN may be acceptable)
- Applying for any business licenses or permits as needed (sales license and zoning permit are common examples)
- Initial report for your corporation or LLC, as required by your state
There may be other county- or city-level filings in addition to your state filings. It’s important to check with your local jurisdictions for requirements.
[Don’t feel like tracking down all of your license and permit requirements individually? No problem! Click&Inc offers a Business License Service that tracks down any licenses or permits you might need based on your industry, location, and business structure.]
What about you—have you made (or narrowly avoided) any startup mistakes on your journey into business ownership? What were some of the sticking points, and how did you handle them? Tell us your stories below!
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