‘Learn from the mistakes of others, you cannot live long enough to make them all.’ These famous words from Eleanor Roosevelt stand more accurate than ever in the business world today. Starting a business is challenging, and making mistakes even before starting can sabotage your entire venture. The best way to ensure your new business’s success is to plan each step carefully to prevent falling into obvious traps.
Here is a list of mistakes that you need to avoid at all costs when venturing into a new business.
1. Not having a business plan
The fatal mistake that one can make when starting a business is beginning without a well-laid plan. Even if your plan isn’t set down to the details, lay out the ground rules in your plan, including your operating costs, production cycles, sales strategies, and financial management. Without these basics, you are bound to fail within a few months of starting your business.
2. Ignoring market research
Ignoring market research before launching a business is like is diving into a lake without knowing its depth. You may never know whether you would survive the fall. Therefore always do your market research, which should include:
Identifying target audience: Understanding who your target audience is crucial for the success of your business as all your marketing strategies would be planned around it.
Audience interests: Knowing your target audience isn’t enough when it comes to running a business. You need to know what your target audience wants in your products and deliver them to make your business successful. Therefore, your market research should always include understanding the interests of your target audience.
Competition research: Understanding what your competition does is crucial for every business. It will help you identify what works with your target audience and what doesn’t so that you can form your business strategies accordingly.
3. Starting without sufficient funding
Finance is the lifeblood of any business; without it, your business cannot survive long. At the initial stages of your business, you will require a lot of capital to cover significant investments and other expenses. Also, the ROI will be slow, so you need to have sufficient backup to keep your business afloat till you start getting a steady influx of money into your business. Therefore it is crucial to have sound finances and efficient financial planning.
4. Trying to do everything yourself
Many entrepreneurs have this misconceived notion that they need to do everything themselves to get it right. On the contrary, having counselors and partners whom you can rely on make everything much more manageable. DOn’t shy away from delegating your responsibilities and skiing for help when you find yourself in a tricky situation. It will free your time and mind to focus on more critical aspects of your business, like growth and scaling.
5. Letting fear of failure lead your decisions
Most business owners fear failure more than anything and shy away from making risky decisions for the fear that they may fail. However, some of these risks are the stepping stones of your success, and giving up on them means losing a lifetime opportunity. Therefore, put aside your fear of failing and take those risky steps, and they are the ones that will set you apart from your competition.
6. Making hiring mistakes
Your employees and partners are going to be the foundation of your business. Therefore any hastiness can leave cracks in your business’s foundation. Always look for employees dedicated to the growth of their business and have the zeal to grow themselves. Instead of increasing the number of employees, focus on finding skilled people who want to succeed in your business.
7. Not using modern technology
In the digital world, technology can make your life and business a lot smoother and manageable. However, some business owners still rely on old-school methods. The problem with some old-school techniques is they are time-consuming and often require a lot of manual labor. On the other hand, softwares and automation tools can reduce manual work and significantly increase your accuracy and efficacy.
8. Not paying heed to offline and online marketing
If finance is the lifeblood, then marketing is the backbone of your business. Without effective marketing strategies, your business cannot survive in this competitive world for long. And you need a marketing strategy that is a combination of online and offline marketing to succeed.
Many small businesses used to rely mainly on traditional marketing methods. However, the onset of a global pandemic has forced everyone to go digital regardless of their size. You should also opt for digital marketing as much as possible as it is more effective and cheaper than traditional marketing.
“Forget about your competitors, focus on your customers.” – Jack Ma
9. Not understanding your business demands
Everyone likes to share success stories, and no one shares the struggles. Wherever you look these days, whether it is social media, websites, blogs, newspapers, or any other medium, you can see businesses sharing how good they are and how well everything is going.
However, in reality, a lot of businesses have to fight tooth and nail to stay afloat. So, don’t jump into a venture believing that it would be easy. You may have to put in extra hours, resources, and efforts to keep things going until things stabilize.
10. Undervaluing your product or service
Many entrepreneurs start at a lower price than the market price to gain more customers at the early stage of business. However, this tactic can become your downfall in the long run as you cannot raise the prices suddenly once you make your place in the market.
Therefore, always charge your product or service at an optimal rate that justifies its value.
11. Not having a bookkeeping process
A lot of businesses fail in the first two years due to improper financial management. And the primary reason for that is the lack of proper bookkeeping methods. A definitive bookkeeping system enables you to keep track of your finances efficiently and maintain your cash flow. You can either hire a bookkeeper or use accounting and booking software for your business.
12. Making unnecessary expenses
When you start a business, many ideas will come to your table, and many of them will be quite lucrative. However, restrain yourself from diving into all of them and only make essential expenses. You can focus on those things that your business cannot do without.
13. Don’t hesitate to form contracts
You may start your business with friends or family members or have excellent relations with your initial clients. However, don’t let your personal ties stop you from making your business deals in writing. It is wise legally and professionally to keep your relationships and business contacts separate.
14. Register your business
Many entrepreneurs start the business proceedings without legally registering their business. It leads to problems later as some of your contracts are not legally binding until you are registered under the state laws.
15. Expanding too quickly
Once your profits reach the breakeven point, you may start looking for growth processes and expansions. However, diving into expansions can cause you more trouble than you fathom if you are not ready for it. Expansion requires a lot of capital investment and your savings and may not cover it. Therefore let your business establish nicely before moving on to expansion plans.
Starting a business is frightening and challenging, but it is not undoable. You just need the right people and a solid plan to follow through. You may have to take a back-step once in a while; however, that does not mean you have failed. Mistakes happen to everyone. It is just a tactical retreat, and you need to find a way around the problem and keep going. In the end, giving up is the only sure way to fail.