Mistakes to Avoid When Starting a Business.
Over 50% of new businesses fail within the first 5 years. How can you avoid being part of this statistic? There are certain mistakes you can avoid when it comes to successfully starting and running a business. Here are the most common mistakes to avoid when starting a business;
1. Business Plan
Most entrepreneurs fail to prepare business plans. Remember, failing to plan is planning to fail. A business plan is very strategic when you’re starting out because it helps you identify if your idea is actually viable and profitable. It can be very time-consuming to create a business plan but it will save you money and time in the future. It also helps keep things in perspective like short-term and long-term goals. It can also be used as a benchmark for your future milestones.
2. Market Research
Take time to do market research for your product or service. Understand that just because you like a product or service does not mean that people will. Test your products and services on a select group of diverse people before starting your business. This way you’ll get a clear understanding of what the market would want. A great product or service doesn’t necessarily mean a great profitable business. It might be a great product but you have to test if the market will appreciate and buy it. If you’re selling niche products how wide can your market go? Is it a buy once type of product? You need to ask yourself these hard questions before starting a business.
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3. Don’t Be Afraid To Fail
Most people are afraid to fail and that’s why most businesses don’t even start. There is a chance that you might fail but what if you succeed? You have to be willing to try if you want to be successful. Failure is a part of success. All you need to learn is how to pick yourself up from a failure. Being afraid to fail in some instances can even lead to poor decision-making.
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4. Inadequate Financial Resources
When you’re starting out a business, you need to know it might not be profitable in the first couple of months or even years. This is one of the mistakes to avoid when starting a business. You need to prepare yourself with the adequate resources that you need to meet your financial obligations. In your business plan, you should have a financial projection f your business for the next 3 to 5 years. This will give you an overview of how much you may need in the first couple of years. Inadequate financial planning can cause your business to go into bankruptcy. Having a foolproof financial plan and adequate financial resources will give your business a fighting chance.
5. Get organized
Starting a business can be tedious and exhausting. Getting and staying organized is very essential. If you’re to run a successful business you will need to hone your organizational skills. You can start out by creating an organization system for your stock, invoices among others. Create a calendar with your tasks to help keep you on track. If you’re not organized you’ll want to do everything and end up doing nothing.
6. Doing Everything Yourself
Running a business involves so many tasks and so many challenges, it’s hard to do it all alone. You are one person, which means you can’t do everything well. If you’re just starting out you might not have the financial capacity to hire a permanent person. However, there are a lot of virtual assistants with an hourly rate that can help with some tasks. You can also request your family and friends to help you out whenever they can. This goes a long way and you’ll have achieved so much more as compared to doing everything alone.
7. Seek Advice
One of the mistakes to avoid when starting a business is not asking for advice. If you’re starting out it means you have no idea what it takes to run a business. Depending on your circle and access, find people who can advise you on any challenges and strategies you need to be successful. There are multiple resources online that can help you. There are multiple videos on YouTube where people give advice on what they did wrong when they were starting out their businesses. There are forums like Quora where you can ask questions from people who have been in the same position as you.
You can’t do it alone, but having too many people will also ruin your chances for success. Don’t get too excited and start hiring like a multi-national conglomerate. This will reduce any little profit you’re getting or reduce your financial resources. If you’re just starting out, hire part-time for the first couple of months or years. Up until a time you can afford to hire a full-time employee.
9. Wrong Partners & Investors
Partnering up with the wrong partner or investor can cost you your entire business. If you’re looking for a partner to start a business with, make sure they’re reliable and you can actually work with them. More often than not most people start businesses with their friends and family only to realize they can’t work together. Just because they are your friends or family does not mean they will make good business partners. If you’re also looking to get n investor make sure you choose wisely. You don’t want an investor who wants to control the business, they should advise and check-in but not run it.
10. Not Marketing
Small businesses don’t spend enough on marketing. Free marketing strategies can only take you so far. They can be effective but they can also take a long time to deliver. In this day and era, having an online website is essential because of the increase in e-commerce. Having an online website will encourage you to market your business before you can even start it. The online presence that comes from having a website is very beneficial. Once you have started your business you can now go HAM on the marketing. There are so many businesses out there and marketing is one way to make it stand out. Create a marketing plan for your business to give yourself an edge.
11. Adapt to Change
As a new business, you need to adapt to change as soon as it comes into play. Adopting these changes will make you stand out. Technology is the one thing that is constantly changing. Keeping up with the latest technology can give your business the edge that it needs. There are business websites that are always updating on the new trends in the industry and how they can help you. It could be a new CRM or invoicing system that’s cheaper than what you’re currently using. Or even a new social media platform where you can advertise your products. If you want to be successful, you have to be willing to adapt to change.
12, Undervaluing or Overpricing Your Product
Before you even get started with your business, you need to understand what you’re actually selling. Don’t just sell a product, sell the experience it comes with. With this in mind, you will know whether you’re underpricing or overpricing your product. If you overprice chances are you might lose your clientele and if you underprice you might undervalue your product. Do your research and make sure you can come up with the right pricing.
13. Self Assessment
You need to monitor your progress or lack thereof as a business. You have to continuously update your progress in your plan and keep updating your projections. This will help keep things in perspective. Are you reaching your goals? Or are you underperforming? Either or continuous self-assessment will help you know the state of the business at all times.
Unless you’re operating in a business that’s a first of its kind which is rarely the case, you will have competition. Ignoring our competition is one of the mistakes to avoid when starting a business. Assessing your competitor can help you price your products appropriately. You don’t want to overprice your products unless you’re sure they’re of superior quality.
If you want to start a successful business you have to be willing to sacrifice a lot. It will demand a lot from you. Your time, patience, persistence, money, and mental energy. Starting a business comes with a lot of demands. You might lose some friendships and even relationships because of your business.
Starting a business is not a sprint, it’s a journey. Take your time and research before you launch. If you’re going into business, do what you’re good at and you are bound to succeed.