Did you know that between 50 and 70% of small businesses fail in the first 18 months of activity? Although this percentage varies by country, branch of activity, period and survey agency, the reality is not very far from that margin.

The purpose of statistics is not to scare . Lack of an adequate and realistic business plan is one of the main causes of these failures, according to Shikhar Ghosh, a speaker at Harvard Business School in the United States. Therefore, knowing the common mistakes that new entrepreneurs incur is a good measure. This way you can avoid mistakes of those who have tried before and minimize the possibilities of failing in your future decisions.

8 common mistakes when starting a business

There are 8 common mistakes that entrepreneurs make when starting a business, indicates the consultant from the Brazilian Support Service for Micro and Small Businesses (Sebrae-RS)

They are:

  • Lack of capital for initial investment, including working capital.
  • Lack of knowledge of the market in which it will operate.
  • Ignorance of the legal and tax responsibilities inherent to the business.
  • Lack of, or scarce, technical knowledge.
  • Inaccurate analysis of the place of installation and marketing.
  • Little or no marketing planning.
  • Financial lack of control.
  • Mix of personal accounts with those of the company.

Vera Rita de Mello Ferreira, PhD in Economic Psychology from the PUC-SP, points out that another common mistake is “going after what is in fashion” without having knowledge of the item in which you are entering, the so-called “herd effect ” “The first one who opened an ice cream parlor did well. Already number 59, it is not known: only if it has a very large differential, “he says.

Read More:   Selling on Facebook: 6 tips to do it the right way

How to deal with common mistakes

Knowing common mistakes is important, but you won’t move forward if you don’t know how to deal with them . According to Feres, before starting a business it is essential that the entrepreneur study what the market demands are and carry out proper planning.

“This initial planning is called a business plan and it will analyze the market (customers, suppliers and competitors), the necessary structure (physical and personnel) and together with that information, the economic and financial viability of the future business. In other words, will it generate income? How long? How much? “Says the consultant.

After developing a business plan , it is vital that the entrepreneur stick to what was planned and invest correctly and wisely, avoiding acting on impulse and “spending more than he should.” At this stage of financial organization, it is also important to assess whether you will be able to face the business alone or if you will do so by obtaining partners and investors.

During operation

However, it is not just before starting the business that mistakes are made. It is necessary to pay special attention in the early stages that follow the opening of a business so that other common mistakes do not appear.

Feres affirms that the employer must always have the objective of having his company recognized as different. ” Doing new things , remodeled, or even in an unconventional way will surely catch the public’s attention,” he says. “The maximum is always to innovate. The world and the market have never changed so quickly. In this way, you must be willing to keep up with the speed of change in relation to the market in which you operate, ”he says.

Read More:   Sales process: how to structure it to generate solid results

It is also essential to hear what people have to say about your business, be they customers, suppliers, partners, neighbors or friends. “Hear a lot, process that information and decide to use it – taking into account many of the needs and shortcomings that you identified during the conversations,” advises Feres, while ensuring that it is important to write down everything you hear and that can contribute to the success of your business.