- Hiscox research reveals new business registrations surge in the first quarter of the year
- Business owners share their biggest regrets from their first year – from underpricing products to straying from their business plan
- Business advisor David Hunter offers tips to budding entrepreneurs
The first quarter of the year often sees a surge in new business registrations, as many entrepreneurs act before the financial year ends on April 5, finds small business insurance provider Hiscox. Hiscox analysed new business registrations data from Companies House, revealing Q1 consistently records the highest number of registrations every year.
For those that have newly launched their business, the first year is crucial to get right.While launching a business is an exciting milestone, on average 20% of startups fail in this time. From undervaluing services to struggling with confidence, many new business owners face a steep learning curve.
To help those starting out, Hiscox spoke to business owners and advisors to share the biggest mistakes they made in their first year – and the key lessons new entrepreneurs can learn to avoid the same pitfalls.
Never forget your why: Stay true to your business vision
As the number of new businesses continues to rise, so does competition, making it all too easy for entrepreneurs to compare themselves to others in the industry. This often leads to self-doubt and a loss of clarity in brand messaging – sometimes even causing them to question the very foundation of their business.
Beth Edwards, founder of nutrition and psychology clinic, Beth Edwards Nutrition, that specialises in type 1 diabetes, found herself swayed by what other clinics were doing.
“About six months into my first year, I lost sight of why I started. I never thought this would happen, especially as working within the type 1 diabetes space was my passion. I didn’t realise what was happening at the time, but I was feeling slightly disillusioned with my offer and started to compare myself to other nutrition clinics. I was swayed by what others were doing, and my messaging became diluted.
“Once I realised that the heart of my work and business was type 1 diabetes, things felt easier. Never forget your why.”
Beth suggests seeking support among other entrepreneurs if you’re second-guessing your offering
“Running a business can be a lonely old gig, and a challenging one. To ease the isolation, I’d really recommend finding a great group of people you can connect with for peer support. Maybe they’re doing something similar to you, or perhaps they’re in a totally different field. Sharing common business problems or problem-solving together, can be a great way to lift each other up.”
Overdelivering and undervaluing services: The cost of pleasing clients
Starting a new venture can be overwhelming and it’s easy for new owners to often underestimate their product and abilities, leading to financial loss and in some cases, burnout.
Alexandra Lunn, owner of Alexandra Lunn Design Studio, found herself undervaluing her services to appease clients in the first year, saying, “early in my career, I found myself going above and beyond for every client request, often at the expense of my own time and wellbeing. For example, if a client was happy with the design work, I would then offer them more assets completely free of charge just for the sake of pleasing them. While the client was pleased, I felt burnt out and realised the importance of maintaining boundaries to avoid setting unsustainable expectations.
“If I could do it again, I’d focus on setting clear expectations upfront, defining the scope of work, and having robust contracts in place to protect both parties.”
“I was an expert in my field but felt like an imposter in the business world”
For many first-time entrepreneurs, launching a business can feel like stepping into the unknown. Even those who are highly skilled in their field often struggle with imposter syndrome, doubting their abilities in the business world and placing pressure on themselves to get everything right from the start.
Beth Edwards struggled with confidence at the start. She recalls,
“I’d spent 4 years training in psychology, up to Master’s level, and then trained in a 3-year nutrition Diploma on top, but what I wasn’t trained in was business. I felt like an imposter, and struggled to get going, so I spent a lot of money on business bootcamps and courses before I felt confident to properly launch.”
Looking back, Beth wishes she had given herself more room to learn through experience.
“I wonder if I should have just launched and learned more on the job, as everyone’s business is so unique and often the best way to learn what works is by taking messy action. And failing, a lot, as painful as it can be. On so many occasions I fell into the perfectionist trap of wanting things to look and feel a certain way before taking action. But perfectionism just blocks us from even trying. If I could go back in time and fully embrace messy action, I would.”
Business advisor’s advice to new business owners:
1. Set the right price for your products and services
Pricing is an area where entrepreneurs often get caught off guard. David Hunter, business advisor and founder of Local Falcon, cautions, “new entrepreneurs might price things too low, thinking it will attract more customers, but that just eats away at their margins. On the flip side, pricing too high without showing why the product is worth it can push people away. Testing prices and paying attention to what works is essential.”
2. Have a clear business plan
A strong business plan provides direction and helps entrepreneurs stay on track. David stresses the importance of setting clear goals early on:
“A common mistake I see new business owners make is jumping in without a clear plan. They’ll have enthusiasm, which is great, but no structure to guide their steps. Without knowing what they want to achieve and how they’ll measure progress, things can quickly fall apart. Even something basic, like setting short-term goals and working towards them, makes a difference.”
3. Don’t do it all alone
Many entrepreneurs fall into the trap of trying to handle everything themselves. David advises against this:
“One mistake that’s less obvious is refusing help. Some think they need to do everything alone but having advisors or mentors who’ve been through it before can save a lot of time and money. This can help founders avoid clinging to an idea even when it’s clear it’s not working. The market changes and being able to adapt is key to staying relevant.”
Nick Thornhill, Direct and Partnerships Director at Hiscox says:
“Starting a new business is an exciting journey, but it also comes with risks. You never know when something unexpected, like a client or customer issue, might arise. Business insurance is a type of cover that can protect UK firms against losses and safeguard small businesses against compensation claims and legal costs. Ensuring you have the right coverage in place from day one, means you can focus on growing your business confidently, without worrying about unexpected costs.”
The views of the experts cited do not reflect the views of Hiscox.
About The Hiscox Group
Hiscox is a global specialist insurer headquartered in Bermuda and listed on the London Stock Exchange (LSE:HSX). Our ambition is to be a respected specialist insurer with a diverse portfolio by product and geography. We believe that building balance between catastrophe-exposed business and less volatile local specialty business gives us opportunities for profitable growth throughout the insurance cycle.
The Hiscox Group employs over 3,000 people in 13 countries and has customers worldwide. Through the retail businesses in the UK, Europe, Asia and the USA, we offer a range of specialist insurance products in commercial and personal lines. Internationally traded, bigger ticket business and reinsurance is underwritten through Hiscox London Market and Hiscox Re & ILS.
Our values define our business, with a focus on people, courage, ownership and integrity. We pride ourselves on being true to our word and our award-winning claims service is testament to that. For more information, visit www.hiscoxgroup.com.
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