Starting a business in 2020 certainly isn’t for the weak. It’s been a tumultuous year with numerous ups and downs directly related to the COVID-19 pandemic. Still, the truth is sometimes innovation can’t wait and if you have an idea to start a business, now is as good a time as any. Even in the best of years, entrepreneurs face unique challenges, and 2020 is no different. According to review42.com, 90% of new start-ups fail, and only 40% are able to make a profit, with 82% failing due to cash-flow issues.
I recently spoke with Sean Smutny, Cofounder of Truth Enterprises, a California-based company. I got his insights into starting a business in 2020. He explained that it is no different from starting a business any other year, except that entrepreneurs must keep a few things in mind. “2020 revolutionized the landscape in which we do business. There are new pitfalls we may not have had to worry about before,” said Smutny. He shares the five mistakes all entrepreneurs should avoid when starting a new business.
1. Doing it alone
A business of any size is a lot to handle, and Smutny does not advise going out on your own. Finding a trusted partner or investor builds a solid foundation from which your business can operate. Smutny explained, “Find someone with strengths that compliment your own. One person can’t do everything, but an expertly assembled team can tackle any issue your business might face.”
2. Not prioritizing digital
If 2020 taught us anything, it is that digital is the future. As restrictions were put in place during the COVID-19 pandemic, businesses that did not immediately go digital are the ones that are struggling. “Make sure you have an excellent web presence, including social media profiles and an online store. We don’t know what the future looks like going forward, but we do know for sure it has been forever changed,” pointed Smutny.
3. Taking on too much debt
There is nothing wrong with taking on debt when starting a business. The problem is when you take on too much. “Debt is a great tool, but what we learned in 2020 is that you have to be ready to face realities that may impact your earning potential. Do not take on heavy debt that will require high sales to repay,” added Smutny.
4. Not defining your goals
Sometimes, entrepreneurs are so immersed in their product or idea they gloss over their goals thinking the business will drive itself to success. After all, you believe in what you created; everyone else won’t? Not right away, no. “It is essential to define your goals, and I mean being very specific, including numbers so that you can implement data-driven strategies for success,” explained Smutny. A clear picture of your anticipated ROI will help you understand if your goals are achievable and the overall health of your business strategy.
5. Avoiding social media
In 2020 social media cannot be an afterthought. Entrepreneurs often create social media profiles for their businesses and make the mistake of haphazardly maintaining it. “Social media is the face of your brand. Treat it accordingly. To succeed, you have to comment, like, reply, inform, every single day, or your audience might lose trust in your offering,” stated Smutny. Today customers are looking to engage with brands, making content the most powerful tool you can use in your marketing strategy. Social media continuously keeps your message in front of your customers, making the investment well worth it.
At the end of the day, we are all bound to make some mistakes. Arming yourself with knowledge before taking the leap will hold you in good stead. Whether it’s 2020 or beyond, the entrepreneurial journey is one of learning, adapting, and overcoming challenges.
