Simply Business homepage
  • Business insurance

    Business insurance covers

  • Support
  • Claims
  • Sign In
Call Us0333 0146 683
Our opening hours
Knowledge centre

Here are 7 of the most common new business mistakes - and how to avoid them

3-minute read

Josh Hall

25 October 2018

Share on FacebookShare on TwitterShare on LinkedIn

Starting a business is a huge moment in any entrepreneur’s life. It’s when you can put your passion into action, and hopefully turn your skills into a way to make a living.

But setting out on your own can also be daunting, and there are plenty of potential pitfalls along the way. To help you navigate the process of starting a business, we’ve compiled a list of the seven most common mistakes – and how to avoid them.

Get your free guide on avoiding common mistakes when starting a business

Download your free in-depth guide on avoiding common mistakes when starting a business. Get instant access to expert hints and tips in the click of a few buttons.

Your email address will be used by Simply Business to keep you posted with the latest news, offers and tips. You can unsubscribe from these emails at any time. Simply Business Privacy policy.

1. Not having a plan

It’s crucial that every new business has a comprehensive plan. This document should include market research, clear financial forecasting, details of marketing channels, and benchmarks you can use to measure your progress.

The business plan is a living document – so once you’ve written it, you need to make sure you keep going back to it as you continue your journey. For more, read our guide to writing a business plan for a start-up.

2. Neglecting the legal side

It’s not the most exciting part of starting a business, but it's really important you fulfil your legal obligations. If you’re operating as a sole trader, this might be as simple as just registering as self-employed with HMRC. However, you might also need to form a limited company, or talk to HMRC about things like corporation tax and payroll.

And, of course, make sure that you understand the key tax deadlines for businesses in the UK.

3. Ignoring the competition

If you’re going to succeed, you need to know what your competition is doing. Competitor analysis should be a key part of your business planning, but it’s an ongoing task. You should make sure that you’re keeping up-to-date with your competitors’ activities – what they’re selling, for how much, and to whom.

What is it that they’re doing well, and where can you carve out a niche or offer something unique? Remember that the answer might not always be to compete on price, as we’ll explore later.

4. Ignoring your brand

Branding is a crucial exercise for every small business and it’s only becoming more important. Your brand comprises many different elements – not just your name and logo, but also the tone of your communications, the customer experience, and even how the organisation itself is run.

At Simply Business we’ve spent years building an award-winning brand, and we’re keen to share our experiences. Some of our senior team have offered their top tips for crafting a brand. Read about choosing a great business name, some essential tips for building a brand that beats the competition, and our experiences in creating the UK’s best place to work (as recognised by the Sunday Times).

5. Getting pricing wrong

Pricing is a common stumbling block for new businesses. It can be very tempting to price yourself far lower than your competition as a way to secure new business. However, depending on your industry, this may not be the best strategy. Especially in the B2B sector, you should remember that clients and customers are looking not just at price, but also at value.

You need to identify what it is that makes your business unique. What do you bring to the table that your competitors can’t? How are you adding value? Or, if you’re offering a completely new product or service, how are you telling a compelling story about why it’s needed? By competing not only on price but also on product and service, you can help to maximise your chances of building a business that can thrive in the long term.

6. Forgetting insurance

Every business should consider insurance, regardless of its size. The exact insurance you require will depend on the nature of your business, but there are a few key covers you’re likely to need, including:

With Simply Business you can compare quotes from a range of insurers, and combine all your covers into a single policy. Compare business insurance quotes today.

7. Making the wrong hires

Finally, as your business grows you’re likely to start thinking about hiring people. In a very small business, making the right hires is absolutely crucial, and you need to carefully consider the role you’re looking to fill.

What specific skills do you need, and what areas of the business do you need support in? How much can you afford to pay? And what sort of contract is best suited to your needs? Your first hire is a huge milestone for any business, but it’s also a high-risk endeavour.

You should do your research, write a great job description and make sure you're asking all the right questions when you interview candidates.

What challenges have you encountered when setting up your business? Let us know in the comments below.

Is your business insured?

We have 800,000 UK policies plus a 9/10 satisfaction score. Why not take a look at our expert business insurance options - including public liability insurance and professional indemnity - and run a quick quote to get started?

Start your quote

We create this content for general information purposes and it should not be taken as advice. Always take professional advice. Read our full disclaimer

Find this article useful? Spread the word.

Share on Facebook
Share on Twitter
Share on LinkedIn

People also liked

9 May 20184-minute read

New business funding - the expert guide

If you're an up-and-coming entrepreneur, you're going to face the challenge of getting investment for your small business. Startup funding…

Read more

Keep up to date with Simply Business. Subscribe to our monthly newsletter and follow us on social media.

Subscribe to our newsletter


Popular articlesBusiness resources from FarillioGeneral businessGuestInsuranceLandlordLandlord resources from FarillioLegal and financeMarketingNewsOpinionProperty maintenanceTradesmanCovid-19 business support hub


6th Floor99 Gresham StreetLondonEC2V 7NG

Sol House29 St Katherine's StreetNorthamptonNN1 2QZ

© Copyright 2022 Simply Business. All Rights Reserved. Simply Business is a trading name of Xbridge Limited which is authorised and regulated by the Financial Conduct Authority (Financial Services Registration No: 313348). Xbridge Limited (No: 3967717) has its registered office at 6th Floor, 99 Gresham Street, London, EC2V 7NG.