Get up and go
According to the Guardian, more and more unknown startups can now compete with some of the biggest companies in the world.
At the end of the piece, John West, founder of Alamy and Manything describes how it's 'an exciting time to be a startup'.
It certainly is, but that doesn't mean startups can afford to get complacent.
Like all small businesses, we had to start somewhere, and we've learnt a few things along the way. Nobody gets it right all the time (that'd just be boring), but here are five mistakes that could cost your startup more than just inconvenience ...
1. Poor branding
According to Janil Jean at Zillion Designs, consistent branding is just as important as establishing your business.
That's why, for example, we use a specific shade of green – and a lot of it.
Your branding should convey what you want people to know about your business. For example, your company might be fun, modern, or caring. That means inconsistent branding not only looks aesthetically dodgy, it sends your clients mixed messages about your business.
This infographic from Zillion Designs points out some common branding mistakes made by small businesses, plus how you can avoid them.
2. Underinsuring their business
This isn't just a sly attempt to try to plug insurance, honest. But clearly it's a subject we're going to have an opinion on.
A few years ago, we asked a sizeable number of freelancers how long it took them to arrange their professional indemnity cover. A whopping 20% had been in business for two years before they bought insurance. A slightly more organised 21% waited three months or more before sorting it out.
So, for that time, these businesses were completely exposed to the consequences of mistakes in their work.
Coupled with the fact startups are often financially fragile, shelling out to resolve a claim could be disastrous. Setting up the right insurance as soon as you're in business will limit your exposure to damaging claims.
3. Neglecting tax laws
When you're an employee, tax is a necessary evil. At least you have the luxury of someone else sorting it out.
However, when you're running your own company, you’re on your own. That means organising your own national insurance, income tax, and VAT. Oh, and don't forget your annual tax returns.
We won't deny it: it’s a faff. But failing to do so can result in a series of unpleasant fines from HMRC. For example, you can expect a £100 fine if your tax return is just one day late, plus additional fines depending on how long you take to pay up.
A good source of advice is the HMRC website. It provides information on deadlines, as well as how to pay. You should also check out Tax Donut, which provides tax and national insurance advice specific to small businesses.
4. Poor or non-existent market research
In the words of Startup Donut, market research can be "the difference between success and failure".
You might have the best idea in the world, but unless you know your potential customers, your product, and who your competition is, you could still end up floundering.
Luckily, the lovely people at Startup Donut have created a helpful guide to market research. Set yourself clear goals before you start, try to be as accurate as possible, and don't ignore your results if they contradict your expectations.
It's time-consuming, but strong market research is the best way to give your business a good start. If your business were a house, think of market research as the foundations.
5. Ignoring trends
For a while, Twitter and Facebook were the full extent of our social media presence.
We started to hear more and more businesses talk about Google+ so we decided to give it a shot. Since then, we haven't looked back. Although we were more than a little perplexed to begin with, we now use Google+ almost as much as Twitter.
We're not saying you should blindly follow every business trend you see, but you shouldn't disregard them for the sake of individuality, either. Assess each trend on an individual basis; how are your competitors benefiting from it, and how can it help you?
Business trends could be a passing fad, or a new way of doing things. You won't know until you've investigated. Besides, trends happen for a reason; if it was a bad idea, nobody would copy it, would they?
Start thinking
It’s not an exact science, but avoiding these five clangers should give your business more of a fighting chance.
What do you think? Made any business blunders you want to share with your fellow startups?
If so, we'd love to hear from you. Pop us a comment in the box below, or tweet us @PolicyBee.
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