- Choosing the wrong business partner. One of the least considered and often rushed decisions a new business owner can make is who they choose as their business partner/s. It is very common to establish the idea for a business in conversation with a friend, a colleague or a loved one and fuel one another’s enthusiasm until you do decide to make the steps to start a business. While friends and family members can be the perfect fit as a business partner, it is still important to evaluate what they bring to the business. Ideally, you want a business partner who approaches your business differently to you and who has skills that meet your needs. A business partner with a different approach will challenge your ideas and help you defend, analyse and hone how you approach your business, while a business partner with different skills to you will help cover the gaps in your knowledge and save you money. A 2016 NAB report into Australia’s business culture found that only 13% of those surveyed would start a business with their friends,
- Forgetting why you started a new business. The same NAB report found that approximately 1 in 3 Australians want to own their own business, with young Australians understandably more inclined towards such a goal at 1 in 2. Why do people want to own their own business? The biggest aspiration for a business owner is just that: to own their own business and be their own boss. With this aspiration comes the desire to be in control, whether it be of the decisions that affect a business or just to be more in control of their own time. Running a business can be such a challenge, however, that it can be all too easy to forget the reasons why you started a business, as you become a hostage to your own business.
- Taking on too much. If you become bogged down in every little detail of your business (especially administrative tasks) that could be done by someone else or that you could partially automate, you risk not giving yourself enough time to develop the business. With this problem of overburdening yourself comes the added risk of creating a business that relies on you to function. Too many failed businesses are a result of an owner building up a business that can’t function without them present, which not only affects an owner’s personal life but risks complete failure if the owner becomes sick or there occurs a similar constraint on their ability to function. For the sake of your business’s bottom line and to set it up for a possible sale in the future, you want to try to lessen your day-to-day responsibilities as the owner so that the business can stand on its own feet.
- Being overly protective. If you remain overly protective of your business and your own role in driving its growth, you may risk missing opportunities in the future. For instance, if an investor is interested in your business but wants a majority share, this may not be worth considering unless you can see that your business needs that investment to grow further. In this situation, ask yourself whether you would prefer to own a small stake in a successful business or a major stake in a stagnant or failing business.
- Favouring low costs. If you keep your costs down so low that you cannot accommodate opportunities for future growth, you risk treading water. For instance, you may rent a warehouse or space that is low in cost but restricts how quickly or to what extent you can increase production or improve your business. It is one of the hardest juggling acts when building a business, but you may need to spend money to create the room for future growth.
Interested in what’s on the market? Find businesses for sale in Australia here.