Mistakes to avoid when starting a business

Most startups often begin with enthusiasm but fail to stand the test of time to sustain themselves

It is however vital for organized efforts and activities of individuals running particular businesses to ensure its survival.

In Ghana, statistics show that most startups and new businesses often do not flourish beyond three years.

The trend is even more worrying as the former Minister for Business Development, Awal Mohammed had earlier disclosed that about 70 percent of Ghana’s SMEs collapse within their first three years of setting up.

Owing to this, a deficit has been created on entrepreneurs, as they are confronted with a lack of access to both capital and markets.

Though such failures can be attributed to various reasons, GhanaWeb in this piece has compiled some major mistakes to avoid when starting a business.

Make a business plan

For successful startups, having a business plan is key to the growth and efficiency of your business. This strategy document will decide as to whether your business can survive all facets of change. It is also important to always review your business plan to adapt to growing trends.

Register your business and keep your records clean

It is important for one to register your business with the Registrar’s General Department, furnished with the right details and information. Bad records or falsified documents often lead to a lack of compliance and subsequently a collapse.

Be compliant with auditing

A failure to audit of all company records is often a mistake many startups business do. They often turn to focusing on profits rather than record-keeping of such profits and this could lead to revenue leakages.

Don’t partner with the wrong investors and always sign a contract

An important aspect for entrepreneurs to consider when starting a business is that their investors are more than just financial backers.

It is said that a company's first set of investors will either make or break it as most investors place their confidence in the business's potential without sometimes having a proof of concept presented to them.

Should you have investors interested in your business, one should be employing the services of a lawyer to draw up a contract which will be signed by parties involved. This often gives clarity to business profits, investments and expenditure.