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10 Worst Mistakes that cosmetic start-up owners make

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You have got a really great idea for a formulation that you developed. You are filled with enthusiasm and want to start your business, and register your trademark to get going.

You are pretty sure that the world is going to buy your product or service. But the road ahead will be filled with several bumps and potholes, from outside competition to legal disputes within your own company.

To help you steer clear, we have jotted down some of the worst mistakes that cosmetic start-up owners make, so that you can avoid them.

Someone has rightly said;

"A wise person learns from the mistakes of others"

So, we are giving you an opportunity to learn from the common mistakes of starting a business;

1. Taking too long to launch: I remember my days when we used to think about starting our own business during our MBA. During that time, we used to work hard on SWOT Analysis, research, and jotting down the vision & mission of our company, that when we used to see behind, we used to find huge work done by our team, without any result.

You can plan and research forever, but the key is to just get out there, and then there will be natural feedback and momentum to carry you forward.

In fact, if you spend too much time on your idea, you may be wasting time creating something that is not quite right for your customers. Get what you are offering in front of them and let them help you create what they need most.

I would like to give an awesome example here - Kodak was the first company to introduce GUI and a Mouse in computers, which they were doing for fun, and asked Steve Jobs to check out. Kodak knew that this was fun to use, but they didn't have the courage to introduce their product in the market and take risks, which made all the difference.

If you have something in mind, don't think more about it, just go out and start selling, your customers will guide you with improvements to your product or service needs.

2. You are not clear about the time and budget your product or service will take: So you think you have enough money to get you through the lean and poor start-up days. Think again.

I think we underestimate how long things will take and how much money we will need to start our business. 

Most of the start-ups are killed because they behave like a start-up and not as a Business.

Businesses are opened with a long-term vision in mind, but start-ups are created with a miracle in mind, which actually never happens. So, don't have a start-up mindset and wait for some miracle to happen. Have realistic goals and have a clear idea about the timeline and budget that you might need to start a business.

3. They fail to begin with the end in mind: Entrepreneurs often begin with excitement and optimism thinking they will do whatever it takes to succeed.

Adopting a big picture approach, and having a vision and mission in your mind will set you apart from your competitors. This will also help you in having a roadmap, which will guide you with your actions.

4. The follow the trend: Cosmetics as an industry is too saturated with products that will make you feel good.

There are big multinational companies, who have huge capacities to manufacture products for a year in a few days, so you will have to come up with innovations that are different from the current trends.

Developing a formula for a soap, which can treat or prevent alopecia is better than investing in another similar organic soap.

5. They neglect legal protection: So you are starting a business with a college friend, you have written your plan on the back of a napkin, and sealed the deal with a clink of your glasses. Great, but don't neglect the next steps.

Often people are so excited about getting the business up and running that they're hasty and forget to do things like a founders agreement, employment agreement with early employees, proper privacy policy, trademarks, and other compliance items.

Failure to address these beginning steps can come back to bite you years down the line.

6. They assume they need to raise a ton of money right away: Entrepreneurs often think that they need to raise outside capital as soon as possible. But the bottom line is that you are much better off beginning by earning money on a smaller scale for your business.

There is always a way to validate a concept on a small scale. Once you have proven that there is market demand for your product, potential investors will see your company as more valuable and it will be easier to raise money.

7. They spend too much too soon: Having fancy offices, and an expensive get-together is something that every business owner dreams about. But doing these all things will actually make you regret them sooner.

Similarly hiring staff as well. It feels great to have a dedicated full-time staff. But it will eat you alive if the economics don't support having that number of people on the payroll.

And guess who will go without a paycheck if cash flow gets dicy? You. Keep your organization lean until you reach a revenue level that can truly support employees.

8. Now working on packaging of your products: Cosmetic products demand packaging to be taken seriously. Wrapping up your products in cheap polythene will save you some bucks, but it will affect your brand as a whole.

Instead, invest in decent packaging of your products, which will also create an impression on your customers. Decorate or have some beautiful quotes in your packaging, which will encourage your customers to buy your products more and more.

9. Not having consistency: There should be consistency within your products. Your products cannot be of good quality in one batch and then average in another. So, ensure having consistency and have a good quality check on your products so formulated and manufactured.

10. Not having proper tests: Your products and services are your brand ambassadors, hence you should have proper tests in place.

Invest some money in getting your test results from a reputed testing lab. This is important because your customers believe in you, and even a single complaint can get you in trouble.

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