While 2020 pushed many to go into business, not all of those who started their business had a solid foundation.
These entrepreneurs rushed into things but failed to see important prerequisites in building a business. These mistakes are not uncommon-- there are many startups that fail within the first five years of operation. An entrepreneur should be armed with more knowledge on sustaining the business.
Budding entrepreneurs should avoid these mistakes:
1. Absence of a real business model
One can come up with a thousand ideas of what to offer to the market. However, this is not enough to ensure that your business will prosper. There should be a solid business plan. Planning is very important because it allows you to see in advance everything that needs to be done.
2. Not doing market research
You may have thought of a unique product to sell, but without a market need for it, your business is bound to fail. Before you even focus on a particular product to sell, do market research on what is really needed and in demand. From there, you can make your products more appealing than your competitors' offerings.
3. Insufficient financial planning and management
It is important that you have a competitive price without sacrificing the profits of the company. If you charge too high, it may scare your customers away. If your price is too low, you may not earn enough to pay your employees, raw materials, and other overhead costs.
4. Insufficient funds to run the business
One mistake of entrepreneurs is that they use their profits for their personal needs without doing the math. You should set aside only a part of what your business earns each month for personal use instead of using all of it or most of it. No matter how small your business is, the funds should be intact. Your business will fail due if you lack the funds to keep it going.
5. Creating the wrong team
You can’t run a business on your own so it's important to carefully choose who to assign to a post. Family or friends may approach you and ask a favor to give a job to his son, daughter, nephew, or niece. While you wouldn’t want to hurt the feelings of your friend, it is still best to allow a certain time for evaluation of the individual’s performance prior to hiring. You can’t get employees out of pity. You need to have a strong team that will help you reach your goals for the business.
6. Poor marketing strategies
A product gets its way to people through great marketing strategies that can easily encourage customers to buy. The internet has become a very important tool in every business. Great marketing can make customers flock to your store. Examples of creative ways to increase your customer base are by having an online contest, loyalty program, and referral program. Make these as exciting as you can so your loyal customers could encourage their friends and family to try your products, as well.
7. Loss of focus
Some entrepreneurs make their startups succeed in just a few months. Because of this, they feel they need to step up by either opening it for franchising or starting another business. However, it may be too early to be jumping to another business. I suggest giving it a little more time to focus on the existing business, strengthen the team, and maintain the momentum.
8. Overlooked legal issues
It is important that every business comes out unique- from the name of the business, the branding, etc. Copyright infringement is one serious matter. Before you even get started with the business, make sure that you have all the necessary legal matters settled and ensure that you are not exactly duplicating another business. Also, all the necessary paperwork to make your business up and running should be taken care of to avoid interruptions in the business later on.
One may seem to have a perfect plan to start a business, but there are small details that cannot be discounted which can affect your business. Be sure to have the right level of planning, thorough research, and self-awareness so that you can identify the weaknesses that can put a dent in your business.
For more information, you may contact Armando "Butz" Bartolome
by email: firstname.lastname@example.org
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