As humans, it is natural to make mistakes and learn from them. But be careful, some mistakes can literally get you sued! As new and budding entrepreneurs, people make some mistakes that are pretty common but dangerous. Some of these mistakes should be avoided as these can get your startup shut down or can burn a hole in your pocket because the amount to compensate these can be large.
Making mistakes in the beginning stage of anything is normal. But sometimes, committing mistakes can be troublesome and demotivating. So, here are some of the most common mistakes that new and budding entrepreneurs and how to avoid them. This way you can go smoothly in your business and will be able to save some time and money.
Copying Someone Else’s Terms and Conditions
When you create a website for your startup or business, which is sort of mandatory these days, you are required to specify some terms and conditions and privacy policy in order to make sure that your website is legit. Many people may advise you to just copy and modify others’ terms and conditions and privacy policy in case you don’t have much money to spend. But not every advice is healthy.
Terms and Conditions and Privacy Policy are subjected to Copyright. So if you copy these from someone else’s website, they have the full right to sue you for copyright infringement. This can be fatal for your business/ startup as well as for your career. So, the best advice is to spend some money on these contracts and get your own Terms and Conditions and Privacy Policy in order to avoid any troubles. You can seek help from some legal advisor or lawyer to do this.
Going to a Lawyer First Instead of Going to an Accountant
For someone who is just diving into the business world, one of the biggest questions is “How to make my business official?” This simply means registering your company or startup in a correct way to get the proprietorship, business license, incorporation, or whatever that is what you’re looking for.
Many budding entrepreneurs tend to simply go to a lawyer and get their documentations completed in order to register their business. But it is advised by many experts and business coaches like Vanessa Lau to go to an accountant first. This is because an accountant will look at your personal taxes, income, and your goals for your business. Then accordingly, they can advise you which type of corporation or business you should get registered, viz, proprietorship, incorporation, etc.
And then, your lawyer and accountant can work together to formulate the documents for registering your business. These documents will then dictate the structure of your business. If you don’t follow this, it may lead to some mistakes in your documents and those mistakes will require an extra sum of money to be corrected.
Read more: How to get a company registered
Not Charging More for Payment Plans
When you work with a client, they can either pay you in full or you can give them a payment plan. A payment plan simply means paying in multiple monthly installments. The issue with payment plans is that when you split the entire payment into several transactions or invoices, you will have a higher transactional fee. This means that you are losing more money in paying this fee now when you are splitting the payment.
So to make up for the increased transaction fee, it is advised to charge extra on payment plans. The best practice is to charge 10-15% more in case of payment plans. Also, not charging extra from the clients paying in installments is unfair for the clients who pay you in full.
Taking So Many Sales Calls
You might wonder why this is a mistake as having more sales calls is a good sign for a business. But it is not necessarily true. This is because not worth your time. You can’t really spend an entire day hopping on calls because not every prospect will turn into your client. If you feel that a certain potential client will not be fit for your business, learn to say NO.
In the beginning, entrepreneurs may feel scared about not getting many clients. And hence, they spend unnecessary time on sales calls. So, a bit of good advice is to do a little research and try to understand whether that potential client will be worthy of your time or not. Also, try and understand that if a prospect can pay the money, this doesn’t always mean that he/she is an ideal client,
Poor Bookkeeping
Bookkeeping is the recording of financial transactions and is part of the process of accounting in business. Transactions include purchases, sales, receipts, and payments by an individual person or an organization/corporation.
Budding entrepreneurs often tend to do this task themselves using various free apps available. There is nothing wrong with using those apps if you can actually record all your transactions accurately. But if you are not able to do so, you should really hire a professional who does this for you. By spending some extra money on this, you can avoid hassle and confusion at the time of paying taxes and planning for the future.
Conclusion
The mistakes mentioned above are the most commonly observed ones. As someone who is just starting out, you might want to spend less in some fields of your business which makes room for mistakes. And just to correct these, you might have to spend a lot more than what was required to avoid these. So, always be smart when it comes to spending money. Another key takeaway is that your time becomes more valuable as you grow in your business. So make sure you are spending it in a way which is good for your business.
Read more: Top Chrome Extensions for Online Businesses
Written By - Neha Kundu
Edited By - Kashish Chadha
Social