Let me tell you about my friend’s experience when she initially started her first business. She had a big dream—open a handmade women’s handbag brand. She loved crafting handbags herself and had a whole room full of supplies. Her friends loved them. She thought, “Why not turn this into a real business?” She rushed to make a logo, set up an online store, and started selling. But after a few months, things weren’t going well. No one was buying. She ran out of money. And she had no clue why. The truth? She made some of the most common mistakes when starting a new business owners make.
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Starting a business is exciting, but it’s not just about having a great idea. It’s about doing it right. Today, I’ll walk you through 11 mistakes to avoid—and how to stay ahead with smart planning.
11 Mistakes to Avoid When Starting a Business – Fix Them Before They Happen
Starting a new business always will give you this thrill, a rush of excitement for starting something new that will potentially make you a living.
However, that excitement may get in your way, blur your sight, and make you commit terrible mistakes in the process.
Today, 11 of the most common mistakes new business owners make will be covered, so you can bear them in mind and avoid them even before they occur.
1. Skipping Market Research
We think our idea is so good, people will surely want it. But reality may hit you hard if the correct market research is not made.
You create something people don’t actually need.
According to CB Insights, 42% of startups fail because there’s no market need.
Before starting, talk to real people.
What you can do instead at the beginning, talk to real people.
Ask them what they need. Use surveys, interviews, and simple test versions of your product to learn more.
You don’t need to hire a fancy research firm at the beginning.
You can start running your tests on your community, school or gather small groups of friends and family.
2. Building Without a Business Model
We assume people will just buy—and that’s enough.
If you just go out there pedal to the metal, without a business plan, you end up with a product, but no plan to make money.
A good business model will help you think through how you’ll earn money, who your customers are, and what your costs will be.
Define your prices, who you serve, and how you’ll earn. Write it down. Know it well.
3. Underestimating Capital Needs
We hope everything will go smoothly-and cheaply. Down deep in our guts, we can’t help a desire to invest a little and profit a lot.
That couldn’t be farther from reality.
When you don’t consider all costs and expenses related to your business, you run out of money too soon.
The U.S. Small Business Administration (SBA) says most small businesses need between $2,000 and $5,000 to start—sometimes more depending on the industry.
One simple way to prevent this is just to plan for double your expected costs. Calculate your “runway”—how many months you can last with the money you have.
4. Not Setting Up Legal/Financial Foundations Properly
Legal stuff feels boring or scary.
Every new business, aside from the product or service that it will offer, mus also have the support of an accountant and a lawyer.
What could happen? Tax problems. Lawsuits. Trouble getting loans.
Set up the right legal structure (LLC, sole proprietorship, etc.). Get an EIN from the IRS.
Make sure you have licenses and permits.
Keep business and personal money separate.
Hire a lawyer and an accountant.
Make a checklist. Ask for help from a small business advisor or a free SCORE mentor.
5. Hiring Too Soon (or the Wrong People)
We feel overwhelmed and want help fast. The downside? costs.
Additionally, you have the high risk of hiring someone who doesn’t match your goals.
Don’t rush. Start with freelancers or part-time help. Be clear about what you need.
Look for people who believe in your business, not just someone to “do the work.”
6. Ignoring Branding and Positioning
We think the product will speak for itself. You can’t deny that you are biased towards your product.
You created it; it’s your baby.
If you don’t work on the right branding for your product or service, people will forget your business or won’t understand what you offer.
Create a strong brand. Think about your message, tone, and style.
Define your unique value—what makes you stand out.
Don’t name your online pet store “Bargains LLC.” Be clear and catchy—like “Furry Finds” with a tagline like “Unique Gifts for Unique Pets.”
7. Not Having a Marketing Plan
We hope customers will find us on their own, while in reality no one visits your website. No one knows you exist if you don’t create the right marketing campaign.
Marketing is how you reach people.
There are different kinds:
- Brand marketing (building awareness)
- Performance marketing (like Facebook ads)
- Direct response (email campaigns)
Plan a 90-day strategy. Mix free and paid marketing. Post on social media. Build an email list. Offer helpful content.
8. Avoiding Sales (Or Not Knowing How to Sell)
Sales feel pushy or awkward at times. But, if you don’t sell you don’t make money, even if people love your product.
Sales isn’t about pushing—it’s about solving problems.
Don’t brag about how cool or good your product or service is if you don’t demonstrate your customer how well it works for them in trying to solve problems.
Instead, learn a simple method like SPIN Selling or consultative sales. Focus on listening and understanding your customer’s needs.
9. Doing Everything Alone
You want control or can’t afford help.
If you decide to do all by yourself, burnout will appear. Missing out on advice. Doing things the hard way.
Fact: Startups with mentors or co-founders grow 3.5x faster.
Build a small support system—join a business group, talk to mentors, connect with other women founders.
10. Neglecting Customer Feedback
We fall in love with our product, but does your customer do as well?
Feedback is quite important to develop new product lines or fix any problems with your current ones.
Use tools like Net Promoter Score (NPS) to learn what customers really think.
Ask for feedback often. Use surveys, emails, or live chats. Improve based on what you hear.
11. Failing to Track Metrics That Matter
We tend to focus on things that look good, not what works.
When you ignore these metrics, you chase likes instead of sales.
Focus on actionable metrics.
These include:
- CAC: Customer acquisition cost
- LTV: Lifetime value of a customer
- Churn rate: % of customers who leave
- Gross margin: Profit after costs
Runway: How long your money lasts
Avoid “vanity metrics” like Instagram followers if they don’t help your business grow.
My Final Thoughts
Avoid Mistakes Before They Cost You.
Every business will hit bumps in the road. But avoiding these 11 common mistakes can save you money, time, and stress.
The best part? You don’t have to learn the hard way—others already have.
Learn from them.
Build smart.
Keep going.
Which of these mistakes surprised you the most—and which one are you working on right now?
Last Updated on 9th June 2025 by Emma
