New business owners tend to jump into their new venture with guns blazing and high expectations. Or, on the other extreme, some new business owners proceed with such caution and concern that instead of making decisions with confidence, they make most decisions with consternation. While you might hope for smooth sailing, there’s little doubt that there will be a few bumps in the road along the way from while turning a fresh startup into a successful enterprise. If you’re amenable to some friendly advice from those who’ve been in your shoes, take five minutes to read about some of the most common yet avoidable mistakes and missteps experienced by most new business owners. You’ll be glad you did.
Failure to Plan
As the old saying goes, “failure to plan is planning to fail”. If you’re the “I’ll cross that bridge when I come to it” kind of person, you might be in a for a truckload of hurt. While in the past you may have been able to get by with spur of the moment decisions, improper or incomplete planning is simply the biggest misstep an entrepreneur can make. If you want to successfully launch your business, put your ideas and thoughts on paper or in a database. If you can, making a proper business plan will be an even better way to firm up your ideas and make sure they’re implemented properly. Just being able to see your dream in writing can help you realize it. At a minimum, your business plan should list your goals, financial and operational plans, and thoughts on marketing. This is not intended to be a static document; keep it fluid and update it each and every time a new thought comes to mind.
Lack of Familiarity with Your Target Market
Not knowing your market could mean the beginning of the end for your business. Is the product or service that you’re planning to promote viable in your area? You’ll need to do a lot of homework to make sure that your business idea is sound. For instance, you might need to find out what kind of saturation you’ll be confronted with, i.e. how many competitors will you be facing within a specific radius. Then you’ll need to check if your pricing will be competitive or if you will you be pricing yourself out of the market? Are you adding value that justifies a higher price? Are people willing to pay for that additional value? Is your offering unique enough that you’ll gain market share? Are people even interested in what you’re offering?
Lack of Investment in Promotion
It would be great if you could start selling without paying for marketing or advertising. Unfortunately, this isn’t likely to be the case. You can’t wait for the mountain to come to you; there’s a really good chance you’ll have to go to the mountain. Get your name out there in any way you can. Start with creating a website for your business and expand your online presence with pages on social media to show that you’re everywhere. Consider offering an introductory price, coupons or freebies of some sort to draw traffic in, whether you want foot traffic or virtual traffic. There are many ways to get your brand out in public, and quite a few don’t cost much money, so don’t let lack of funds be your excuse.
Being Closed to New Ideas
Many entrepreneurs make the mistake of thinking that they know what their potential clients need or want, and they are so focused on their offering that they don’t stop to take advice. You may be offering a great, and perhaps in some instances vital service but if your potential customers don’t agree because it isn’t exactly what they need, you’ve lost a sale. Listen to your audience and adapt if need be. Many new businesses fail because the owner is unwilling to deviate from his initial plan. Make sure to remember that markets change and demand changes, so you must be willing to change your focus or offering if needed. It’s just part of being an entrepreneur.
Failure to Secure Funding
Yes, you’ve probably got big dreams, high hopes and great aspirations, but the fact is those intangibles don’t pay the bills. Nor do they lease an office space, hire employees, buy furniture and equipment, fund inventory, etc. You are dooming your start up if you aren’t liquid right from the beginning. Where can you get the money you’ll need? Maybe you can use your own savings or secure a low-interest loan from a family member if that’s a possibility. If you have a sound business plan with some decent financial projections, then the Small Business Administration might be able to help with a low-rate loan. Banks or credit unions are another viable option. You can also consider a small business loan from an alternative online lender. Do as much research as possible so that you get the best deal available.
Lack of Confidence
A lack of confidence isn’t unusual in a new venture. After all, you’re still finding your footing in either a competitive market or uncharted territory (both can be scary!). That being said, don’t let your newness influence the value you place on your goods or services. It’s tempting to undercut your prices so that you can drive in traffic, and that might be okay as a promotional type of deal, but it will hurt more than help in the long run. If you consistently undervalue your product your revenues will take the hit. Worse, people may feel like your product is worth less than it really is. As a result, you may find you need to make budget cuts in other places (your own salary, maybe). In the long term, there could be serious reprisals as a result. Do your homework; know what your competitors are charging for a similar good or service, and price your offerings accordingly. If you’re as good as your competition (and you are, aren’t you?) then act like it.
Too Much Independence
You don’t need to do it alone. You’re a small business, and this is your baby; everyone gets that. But just as a new parent of a newborn needs a lot of help to ensure that that baby grows and thrives, you can also benefit from accepting help for your new business. Your best hope for a successful outcome is to surround yourself with a team of individuals, especially those that can bring strength where you are weak. Don’t’ hesitate to delegate some of the responsibilities so that it’s not all on you.
If you can avoid those pitfalls and mistakes and listen to the good advice of entrepreneurs who have been in the same place as you, you’ll be on your way to success.