1) Disregarding the Business Plan
It often happens for people to completely disregard a business plan and just go with their gut feeling. If you are chasing a passion hobby, go for it, but for a business? It’s just suicide. A business plan is the foundation of your startup; you need to be intelligent and strategic in your business approach.
So, with this said, the first step to creating a business that is meant to succeed is by making a well-detailed business plan that explains your strategy, course of action, expected sales, etc. Even a small business plan can be sufficient to get the point across.
Developing a business plan is hard work. It means hours and hours of exhausting research and work, but if it leads to way higher chances of your business succeeding (or even staying afloat), wouldn’t it be worth it? As long as it exists and has vital information about how the business will work.
2) Not Researching the Market
Researching the market is the primary way to shape your business strategy and products/services. It makes the prospect of opening a business with your specific idea in mind painfully clear whether it can be sustainable or not.
The economy isn’t built for vast amounts of startups. Investopedia says that in 2019. 21.5% of startups fail within the first year, 30% in the second, 50% in the fifth, and 70% of startups go out of business in their 10th year.
Knowing that most startups fail, you need to outshine most of them to even have a chance at surviving your first year. Market research has a massive role to play in this. Not fully utilizing your products for your target audience (or not knowing who your target audience is) means that you will never achieve your full business potential.
You need to be fully aware of whether people even want what you are offering. Investing in something that nobody wants would just be a waste of precious money.
This doesn’t apply exclusively to pre-launch dates. Even after starting your business, you need to keep searching for new and relevant information for your business. This means getting feedback from customers about your products/services and what you can do to improve the customer’s experience.
There is no perfect product; you can always keep improving what you offer to make it better and stay relevant.
Whether it’s by making the services better, making it more accessible, cheaper, applying new technology, or something else, the bottom line is that you must never stop trying to get further information about the market.
3) Irresponsible Investments and Budget Management
Investments are essential for the expansion of every business. But they can also be very costly if mishandled. It happens all too often for people to get hyped up and invest in expanding their business too early.
What then happens is that the business cannot, administratively or financially, support the overwhelming growth, and it crashes down.
An intelligent approach would mean biding your time and ensuring that your business is stable before making a giant leap. Risks are necessary, but try to take only calculated risks.
This doesn’t apply only to your investments, but to those you let invest in you. Remember that investors aren’t people who just give away money. You will need to think of the long-term consequences of affiliating yourself with potentially controversial investors.
Aside from that, your starting investors are those who will either do your business or break it. So it is vital to make a great first impression to secure the funds for your growth.
Maintaining budget management efficiency is by keeping detailed records of your expenses. This might seem too obvious, but many people neglect to make precise budgeting statistics when dealing with record-keeping.
Good record-keeping is the pillar of a healthy and responsible business, so don’t neglect it.
4) Not Marketing Your Brand
Marketing has become a cornerstone of a successful business in the 21st century. It simply cannot be ignored anymore if you want to succeed. Marketing is the way you gain exposure, and people register your existence. It is critical if your product/services are targeting younger people.
Small business owners will usually disregard marketing because they don’t have a massive budget, so it would be better to spend the money on perfecting the product, right? Having a great product is fantastic, but if nobody knows of it, you will sell as much as if it were a lousy product.
You need to have a balance and pour funds into your marketing campaign to raise sales. There are multiple ways of approaching this. You can opt for traditional marketing, digital marketing, coupons, references, etc.
There are many ways of getting yourself seen, so be sure to research what your target group uses the most. That way, you can lead a more precise campaign.
For example, taking the Pew Research Center statistics into consideration, you can conclude that people ages 30+ use Facebook way more often than younger people. If your product is more appealing to older people, Facebook would be the best platform to market yourself.
5) Staying in the Business Alone
Running a business is no small task. It is a challenging and grueling job that requires time, money, and commitment from you. There is a big difference between going into something alone and staying in something alone.
With this said, the most limiting factor can be the first two. You simply cannot do everything you set your sight on in a business. It’s not only impractical but also impossible. Even if you were efficient as a veteran in every job category, you would still have the constraints of time.
Usually, we don’t even manage to do our own tasks thoroughly, let alone operate the entire business. The only thing that this will achieve is getting you into financial troubles, and you then will need to seek out insolvency services.
So don’t be conservative with your funds; spend money if it means you will get a lot more done. Surround yourself with competent team players who will advise you over the issues with your business plan, potential progress, and improving the overall strategy.
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