Opening your own business is one of the most common dreams among Brazilians — and also one of the most challenging paths that anyone can choose. The excitement of turning an idea into reality, the freedom of being your own boss, and the possibility of building something from scratch seduce thousands of people every year. But the reality of entrepreneurship is rarely as romantic as it seems on social media.
Data on business closures in Brazil are consistently concerning. Research conducted by Sebrae over the past few years shows that a significant portion of small businesses cease operations before completing five years of existence. The reason, almost always, is not a lack of talent or a good idea — it’s the repetition of mistakes that could have been avoided with information and planning.
The good news is that these mistakes follow a pattern. They repeat themselves regardless of the sector, the size of the business, or the entrepreneur’s profile. Knowing them in advance is the difference between building a solid company and learning lessons that are too expensive. In this article, we’ve gathered the main stumbles for those just starting out — and, more importantly, what to do to avoid them.
1. Starting Without Real Financial Planning
This is, by far, the most common and most fatal mistake. Many new entrepreneurs confuse revenue with profit, ignore their own owner’s salary in calculations, and underestimate the fixed costs of the first months of operation.
Entrepreneurship requires what experts call separation between personal and legal entities. Mixing personal finances with business finances is a sure recipe for chaos. When business money finances the grocery bill and vice versa, it becomes impossible to know if the company is really generating value.
How to Avoid It
- Calculate the break-even point before opening the doors. This means discovering how much you need to sell per month just to cover all fixed costs.
- Include the owner’s salary in the costs. If you work in the business, your time has value. Ignoring this completely distorts the real margin.
- Create a projected cash flow for at least six months. List all expected income and all projected expenses, week by week.
- Maintain a working capital reserve. Experts recommend that new businesses have sufficient resources to operate for at least three to six months without depending on revenue.
Free tools like Google Sheets, financial management apps, and Sebrae’s own portal offer ready-made templates for those just starting out.
2. Skipping Market Research
Passion for your own product or service is fundamental for any entrepreneur — but it can be a trap when it replaces objective market analysis. Many people open a business based on what they think the customer wants, without ever asking the customer directly.
Market research doesn’t need to be expensive or complicated. It can start with informal conversations, free online forms, competitor analysis, and observation of potential customer behavior. The goal is simple: validate the idea before investing real money.
Essential Questions Before Opening Any Business
- Who is my ideal customer? What is their age, income, habits, and pain points?
- Who already offers something similar? How do they position themselves and what price do they charge?
- Why would the customer choose my solution over my competitor’s?
- What is the real size of the market I intend to serve?
Ignoring these questions is like building a house without first checking the land.
3. Pricing Incorrectly — Almost Always Too Low
Incorrect pricing may be the most silent mistake in entrepreneurship. The product sells, business seems good, but at the end of the month the money is gone. This happens because the price was set intuitively, without considering all involved costs.
Healthy pricing needs to cover, at minimum:
- Direct cost of the product or service (raw materials, packaging, labor)
- Proportional fixed costs (rent, internet, accountant, software)
- Taxes on sales
- Desired profit margin
A classic mistake is pricing by “looking at the competitor” without understanding their cost structure. A larger company can practice lower prices because of scale — the small entrepreneur who tries to match that price simply goes broke.
There are simple pricing methodologies, such as markup (multiplying the cost by a factor that guarantees margin) and value-based pricing (charging for the result the customer gets, not just the cost of production). Understanding which one makes more sense for your business is a critical step.
4. Neglecting Formalization and Legal Obligations
Informality may seem like a practical solution at first, but it limits business growth in several ways: it prevents issuing invoices, makes access to credit difficult, creates legal uncertainty, and can result in fines and notices.
In Brazil, the MEI (Individual Microentrepreneur) regime greatly facilitates entering formality for those starting with lower revenue. In 2026, the annual revenue limit for MEI is an important point to verify with the Federal Revenue Service, as these values can be updated by law — consulting the official government portal (gov.br) before making any decision is always the right way.
Beyond opening the company, the entrepreneur needs to understand, at least superficially:
- Most appropriate tax regime (MEI, Simplified National, Presumed Profit)
- Labor obligations if hiring employees
- Licenses and permits specific to your sector
- Intellectual property protection, if applicable (trademarks, patents)
Having an accountant from the start is not unnecessary expense — it’s an investment in security.
5. Trying to Do Everything Alone
The Brazilian entrepreneur, especially one starting with limited resources, often falls into the trap of centralizing everything in themselves. They are the salesperson, the attendant, the accountant, the marketer, the delivery person, and the manager — all at once. The result is exhaustion, low quality in everything, and inability to grow.
Delegating doesn’t necessarily mean hiring employees. It also means:
- Using automation tools for repetitive tasks (invoice issuance, post scheduling, automatic replies)
- Outsourcing specific services (design, website development, accounting)
- Finding strategic partners that complement your skills
- Participating in groups, support networks, and mentoring for new entrepreneurs
Knowing where your limitations are and seeking help to fill them is a sign of intelligence, not weakness.
6. Ignoring Marketing and Brand Building
“Good products sell themselves” is one of the most dangerous phrases in business. In practice, an unknown product doesn’t sell — no matter how good it is. The market is full of examples of mediocre solutions that dominate entire categories simply because they invested in communication and positioning.
Marketing for small businesses doesn’t need to be expensive. Some accessible and effective practices include:
- Consistent presence on social media where your audience is
- Updated Google My Business with correct photos and hours
- Referral and word-of-mouth strategies (discounts for referrals, loyalty programs)
- Production of useful content that helps the customer before they buy
Investing in creative and inexpensive gifts that truly delight can be, for example, a creative way to strengthen relationships with loyal customers without major expenses — small delighting actions build strong brands.
7. Giving Up Too Early — Or Persisting Too Long
This is the most difficult dilemma in entrepreneurship. On one hand, many businesses are abandoned exactly at the moment they were about to find their rhythm. On the other, some entrepreneurs insist on models that clearly don’t work, throwing away time and money out of pride or emotional attachment.
The distinction between the two cases depends on data. A business that hasn’t yet found its audience but is actively testing hypotheses, adjusting the product, and learning from each attempt, deserves more time. A business that repeats the same mistakes month after month with no sign of improvement probably needs a radical change — or planned closure.
Successful entrepreneurs almost universally report that their greatest learnings came from failures. The difference is that they used those failures as data, not as final verdicts. This requires humility to recognize what doesn’t work and courage to change before it’s too late.
Conclusion: The Most Costly Mistake Is the One You Don’t Know You’re Making
Entrepreneurship is, in its essence, a process of continuous learning. No entrepreneur reaches success without having made mistakes — but those who go further are those who made mistakes faster, learned more cheaply, and adjusted course with agility.
The list of mistakes presented here is not a reason to get discouraged. It’s a map. Knowing the holes in the road is the best way to avoid them — or, when unavoidable, to fall with more grace and get back up more quickly.
If you’re thinking about opening a business or are already in the first months of your journey, invest time in planning, seek information from reliable sources, don’t hesitate to ask for help, and, above all, keep your eyes open to the signals the market gives you. The business you want to build depends as much on your ability to dream as on your willingness to face reality with clarity.
