My Blog

By Helen Jamieson

5 Common Start-up Mistakes to Avoid

24 November

shutterstock_209990989 (1)It’s great to be a start-up business. Exciting times and plenty of adventures ahead. Those of us running established businesses have almost all been in start-up mode at some point and are well aware of easy start-up mistakes.

However, in my experience, many established businesses hesitate at times to do business with start-ups, unless of course they know the person running it really well. Having people believe in you and then buy from you is probably the greatest of all challenges for start-ups, although some of you may grimace at this and say sorting your start-up funding is also pretty high on the list!

But whatever your challenges, there are ways to make the journey from start-up to established business a little easier. As always, if you first analyse and understand some of the hurdles, you will then know what you need to do to overcome them.

Looking back on my experiences, I have worked with some amazing and brilliant start-ups, but a fair number of very frustrating ones too.

Common concerns

I think hesitations about start-ups for me arise from my thoughts around:

  • Are they flaky i.e. here today and gone tomorrow? (This is definitely my greatest fear when dealing with start-ups as I have seen so many come and go over the years)
  • They might be able to take an order, but can/will they deliver what I need and on time? ( I really don’t have the time or inclination for hand-holding or nagging)
  • Are they running their business like a business, or is it run like a hobby or financial stop gap between paid jobs? (I.e. will they be there when I need to speak to them, do they invoice properly, do they have insurance and will they hop back to a corporate the minute a decent job offer comes their way etc.)

But if you successfully get over the first hurdle of getting a larger organisation to buy into you, the next hurdle is making the business relationship work!

5 Common Mistakes

Thinking specifically about some of the businesses I have dealt with over the past 18 years, these are just a few of the things that have made me think that the business I have just bought into may not, after all, be the right one for my company to be doing business with. With each of these, we have met, discussed proposals and I have been persuaded that they are going to be able to provide or deliver what I need. But then they go and do something that sets an alarm bell ringing in my head:

1. Invoicing: If, at the last minute and without prior warning, a small business submits an invoice that says ‘payment on receipt’, what am I going to think?

  • You have a serious cash flow problem.  I should worry about you being able to deliver.
  • You don’t have a clue how businesses operate. You don’t know that most businesses would struggle to turn invoices around in less than 14 days given internal procedures and processes that have to be followed.
  • You think that my business is also a sole trader and that I always end each long day thinking how nice it would be to stay at work for another half hour so I can log on to the bank and pay any invoices that have come in that day.

2. Website positioning: I log onto your website just to reflect on what we have discussed and agreed but when I start to burrow down and really read the detail (and notice what is missing), I see that all the testimonials and content reflect the business of a sole trader and not the small business of three or four close colleagues you had led me to believe. I now start to wonder about whether your business has enough know-how or skills in it.

3. Communication: After numerous calls that go to voicemail or emails that take 48 hours to get a reply, I realise a pattern is emerging and my new supplier clearly works part time, is definitely never available during school pick up times and totally disappears off the radar on Fridays. Is that something I can work around and why did it have to be me who worked it out due to frustrations with speed of communication, rather than them being upfront?

4. Terms of business: We agree terms but then those terms seem to keep changing. Perhaps we agree invoicing at project end but then 48 hours after we start working together an invoice emerges. Or we agree 30 day terms and then their invoice says 14 days or they suddenly turn around and charge me for a meeting that I thought was simply a sales meeting. I don’t like it when terms keep changing and any battles over terms are simply wasted energy if I have already gone through the process of agreeing them once.

5. Integrity: Honesty is a big issue as once you start to question one thing about your supplier, it’s an easy transition to starting to question everything. Do they really have the clients they say they have, the experience they said they had, what have I missed that they’ve chosen not to be upfront about? I know you won’t be able to launch your business if you don’t carefully ‘wrap’ the truth, but equally if you ‘wrap’ too much, you might find yourself marked down as lacking integrity or, worse still, dishonest. It’s a fine line you need to tread.

My top tips for being a SMART start up

  1. Act as if you are already an established player in the market. Sort out your admin, your paperwork, your terms, your website and make it look like you are serious and know what you are doing.
  2. Don’t be fooled by the media or your friends and family into thinking that your clients will be happy to work around you just because you want a great work life balance and that’s all the rage right now.
  3. Know that business relationships often last years if not decades. So don’t do anything now that will jeopardise your long-term relationship. Often it’s not the first sale that will make you successful, but the repeat sales year after year.

Be SMART. Get it right first time.

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