When starting a business, there are steps you should take as well as mistakes you should avoid. With the right approach, you will find yourself in better position to achieve long term success.
Every year, thousands of businesses close down for one reason or another. Some of these closures are the direct result of making one or more costly mistake.
As you get up and running, it is important to know which mistakes have plagued others before you. This will allow you to avoid the same situation, thus improving your chance of success.
Below are seven mistakes to avoid when starting a business:
1. Overlooking the importance of a business plan. It’s all in your head, right? While you may have a good idea of what you want to accomplish, a business plan, on paper, will ensure that you see it through.
If you need assistance creating one, we’ve created an extensive illustrated business plan guide.
2. Lack of market research. Before you ever get started, it is essential to understand the ins and outs of your market. Here are a few questions to answer:
- Who are your primary competitors?
- How long have your competitors been in business?
- How much do your competitors charge for a similar product or service?
- How big is the market?
- Where are your key prospects located?
By answering these types of questions, you will soon have a better grasp on your market and how you fit in.
3. Not understanding the wants and needs of your target audience. It is one thing to know who your audience is. It is another thing entirely to understand how to get in touch, what they are looking for, and how to convert them from prospect to customer.
Just the same as your market, you need to know your target audience like the back of your hand.
4. Insufficient funding. Do you know how much money it will take to get your business up and running? Along with this, make sure you know how much cash your business will require every month.
If you don’t have enough money in the bank to fund your business, begin to consider other options. From a bank loan to credit cards to a personal loan to alternative lenders, there are ways to obtain financing.
A lack of money has killed many good business ideas over the years. Don’t let your company go down this path.
5. Skimping on marketing and advertising. You know your business has a lot to offer. But guess what? Your target audience may not even know you exist.
You must have a marketing and advertising budget. It doesn’t have to be huge, but it should be enough to spread the word and attract interest.
Your business plan can include information on marketing and advertising, as well as a breakdown of the strategies you will follow and how much it will cost.
As you begin to generate revenue, you can increase your marketing and advertising budget. For help getting started, consider this list of 9 growth ideas that any small business can implement.
6. A lack of flexibility. Early on, you think you know everything. You think your business idea is just about as solid as they come. And then you face some resistance.
The most successful entrepreneurs are those who remain flexible at all times. It may be difficult to change paths. It may be challenging to give in from time to time. This may be something you fight early on. But answer this question: would you rather be flexible or out of business?
7. Ignoring advice. Regardless of your experience and knowledge, you can always learn from others. This is particularly true if you are opening your first business and/or entering a new industry.
Don’t ignore the advice of outsiders. Taking this one step further, you should feel comfortable working with a mentor. For example, SCORE mentors are available to provide guidance, answer your questions, and help you reach your business related goals.
No matter how you look at it, you will make mistakes when starting a business. Even so, most mistakes are avoidable if you are organized, patient, and willing to keep an open mind.
Can you think of any other mistakes to avoid when starting a business? Feel free to share your thoughts in the comment section.
More Resources for Starting a Business
5 Tips for Setting Up a New Company’s Payroll
Your Small Business Plan: Before You Write It, Read This
Startups By The Numbers: Growing Innovation One Small Business At A Time
5 Marketing Blogs Worth a Small Business Owner’s Time
How Do I Get an EIN Number?
5 Businesses with a High Failure Rate