Start your business right - avoid these common, costly mistakes.

Looking to kick off the new year with a move into your own business? Starting out on your own can lead to prosperity, better work-life balance, and greater control over your destiny.

The journey, however, can be daunting. Alongside essential tasks like registering with the Companies Office, it’s crucial to address common pitfalls before launching your business to set yourself up for success.

Here are five lessons for avoiding major pitfalls and starting strong in 2025.

1. What’s your value proposition?

Astonishingly, many folks going into business for the first time don’t think enough about what it is they do, how they will do it, and why customers should line up outside their door. Don’t make this mistake.

A value proposition is nothing more than a short statement on why customers should choose your products and services. It goes directly to the heart of your business and may well have a significant impact on success. Without a value proposition that you (for starters) clearly understand and can communicate, finding customers could be very difficult.

It’s worth bearing in mind, as you formulate your value proposition, that innovation often isn’t in doing something brand new, but rather doing something differently. Elon Musk wasn’t the first person to send a rocket into space, nor was he the first to make an electric car. Closer to home, Wētā FX wasn’t the first company to produce special effects, and Xero wasn’t the first accounting software platform on the market.

Refining and packaging your product well could, quite literally, help you get your new idea off the ground.

2. Identify customers, then reach them

Finding the work is often more difficult than doing the work. Every person setting out on a business venture for the first time must understand this simple principle and it’s the reason billions of dollars are invested in advertising and marketing every year.

You already have capabilities that you believe are in demand, and now you’re armed with a clear value proposition, it’s time to get customers on board. There’s no one-size-fits-all solution, but a wide array of strategies to explore and different techniques will deliver different results.

However, before rushing into LinkedIn, Instagram, and other platforms, start by focusing on who your customers are and where you can best capture their attention. Look up the concept of ‘personas’: creating detailed customer personas can be invaluable in reaching the right people.

When choosing how to engage them, avoid relying solely on the convenience of a digital-only approach. Social media has its place, but setting yourself apart through “real” connections can yield significant rewards, with fewer distractions and better outcomes for your time. In the old days, they called it “shoe leather” and “pounding the pavement.” People do business with people, so sometimes simply showing up and telling customers what you do is the most effective strategy.

3. Set the right price

Again, this pitfall might differ wildly from one industry to another, but a pitfall it remains.

Particularly for those setting out for the first time, hitting the correct price point can be surprisingly difficult. If prices are too low, people question quality. If they’re too high, your (prospective) customer might look straight past your offerings.

Before pricing up your offerings, do your homework. The correct pricing is “that which the market will bear” but must consider the pricing of similar offerings – which should serve as a baseline from which to work – as well as the cost of your overheads.

If you follow companies like IKEA by innovating to deliver high-quality products at more affordable prices, you may need to assure customers that lower costs don’t mean compromised quality.

Of course, pricing should ultimately be at a point where the value of what you provide exceeds the costs. That difference is your earnings.

4. Setting up professional systems

For the first-time business owner, this is a routine challenge and common pitfall. It’s a pitfall with a long shadow, too, as many businesses outgrow rudimentary paper-based systems only to choke on them for years after the fact. After all, your expertise is in building, retail, small-scale manufacturing, or perhaps physiotherapy – and not in creating an efficient workplace.

These days, setting up appropriate systems is greatly eased with the inexpensive availability of everything from office productivity software to accounting packages or professional email addresses set up on your domain name, e.g. info@mybusiness.co.nz. Beyond these obvious basics, there may well be apps or systems that can significantly accelerate the pace of your operations at a very low cost, while reducing administrative overhead. Find out what similar businesses are using and do your homework carefully by asking others what they use, and why.

Getting the setup right from day one doesn’t just mean your operation runs better, with reduced paperwork or exact timekeeping or better inventory control. It also means that when you send out invoices for the first time, they are professionally presented, accurate, and on time. Professional systems aren’t just for your direct benefit – they also make it easier for your customers to do business with you.

5. Getting a team together

New business owners will often say how lonely it can be. And difficult. Setting out for the first time is especially daunting, as there’s a very high likelihood of doing everything from the line of business (the thing you do that earns money), to various aspects of management including invoicing, accounts payable, human resources, and endless administrative and supportive tasks.

Many of these can and should be under your remit, at least initially. After all, keeping costs down is crucial in the early days. But don’t fall into the trap of cutting corners and doing things badly where professional expertise is required. Top of the list here is accounting; get a good accountant who knows your business well from day one.

You might also want legal support, and human resources or payroll assistance. These essential services often don’t come with enormous upfront costs but can – particularly down the track – truly save your bacon.

By taking the five essential steps above, you’ll not only be setting your business up to launch in 2025 – you’ll be building a strong foundation for long-term success.

With JumpStarter as your business startup co-pilot, you’ll have all the tools you need to bring your brilliant business idea to life. Ready to take the first step? Visit JumpStarter for expert tips, easy-to-use resources, and all the guidance you need to get started.

For more information visit: jumpstarter.co.nz