Starting a business means taking a step into the unknown. There is a seemingly endless checklist of things you have to do in order to begin– and all of the steps might be overwhelming. It can be easy to get lost along the way.
Not all businesses survive– and what you do and do not do during your start-up stage can define your company for years to come. Ensuring that you tread carefully during the beginning stages of your business is the key to success once you establish your business more firmly.
The significant problems we face cannot be solved at the same level of thinking we were at when we created them.
1. Not Having a Business Plan
You can have a very brilliant business idea but without a good business plan with activated business value, that idea is as good as dead. A business plan acts as a guide as your idea slowly becomes a reality. It helps you plan out the direction you want to go in, and when unexpected road blocks come up, it’s a great source to return to remind yourself of your goals and trajectory.
A good business plan requires a lot of research and can be time-consuming. However, not taking the time to create a business plan can spell disaster for you in the future. While writing your plan, consider the basics of your business: What industry are you in? What is your budget? Where are your customers? How will you turn a profit?
2. Not Doing a Market Research
A lot of people try to begin their business without conducting proper market research. The holes you see in a market in your specific location might not hold true across the board– so, conducting research enables you to get a clear view of the state of the market you want to operate in.
Don’t let the prospect of market research overwhelm you. If you do not have the resources to conduct your own market research, in many cases there is plenty of secondary research, also called desk research, that you can draw from. This is research that has already been conducted and can be found in various business journals or library databases, depending on your industry. Market research includes knowing your competitors, the price and quality of the products you want to offer, and customer behavior. It is also very important to test your products and services before starting up a business.
3. Ignoring Competition
Competition is everywhere. Even if competitors aren’t in the area of the market you’re beginning your business in, rest assured; they will appear.
How you deal with competition is important– you can’t let it overwhelm you, however you can’t completely ignore it, either. It’s important to look at your competitors head-on. Do not start a business in an already saturated environment. Look for something else to offer, or simply go to another location.
Finding your competitive advantage and your USP, or unique selling point, is an important step in facing your competition. It’s important to center your product and associated marketing not just around the features your product has, but also around specific benefits your product has that others in the market do not.
4. Lacking Focus
When you start a business, it is very easy to lose focus. Once you begin making sales, it’s easy to get caught up in the day-to-day, and forget your focused goals.
Ensure that you don’t lose the forest for the trees– always endeavor to think of your bigger picture, and stay focused on where you’re headed. Don’t become distracted, or else your business will suffer.
Combating distraction isn’t easy– especially when there are so many vital components to juggle when you begin a business. To help manage your focus and progress, you can employ an agile goal-setting methodology. While there are plenty of useful methodologies out there, OKRs– or, Objectives and Key Results— is a framework for setting and tracking goals that has helped both industry leaders and start-ups find success.Lack of Adequate Capital
Not every business makes money right away. In fact, 95 percent of businesses do not make money when they first start out, and a good number of them take years before they start making any money. This means that you need to ensure you have adequate capital available to sustain the business until it makes money on its own.
This money might come from investors, seed money, or your own personal savings. It’s important to keep an eye on how much you’re spending, how much you’re bringing in, and noting that just because you are making sales, it doesn’t mean you are turning a profit.
5. Not Investing in Marketing
No one will know what you are offering unless you tell them. Effective marketing plays a pivotal role in ensuring that customers come to your business. Potential customers will only know of your location and what you offer through effective marketing. Therefore, do not be afraid to invest in an effective marketing campaign.
Regardless of your budget and reach, it’s important to stick to the four main pillars of marketing: promotion, product, place, and price. Promotion involves your advertisements in all mediums, as well as public relations. Product refers to the item you are selling or service you are offering. Ensuring it is of the highest quality possible is part of your marketing strategy. The third pillar, place, indicates your target audience and customer base. Ensuring you’re bringing your promotional material to the right place so the right people will see it is half the battle. And finally, price is the fourth pillar. This number is quantified based on your target audience, competition, production costs, and the quality of your product. Hiring Too Soon
While all of the mistakes on this list can have an immense, negative impact on your start-up, this one is by far the biggest blunder you can make when starting a business. Bringing on new hires means needing to pay a salary, offer benefits, and manage employees. This opens up the door to getting help with your workload, however it also invites some issues– including financial and interpersonal ones.
Instead of hiring full-time employees, it is a good idea to start with one or two part-time employees and then see how your business performs. However, if you can do most of the things on your own why hire? Only hire when it is necessary
When preparing to start a business, there is no end to the perspectives you have to consider to truly feel like you have your feet on you. Chances are, your business plan will get off course, issues will pop up, and the progression you imagined will not proceed as planned. Despite this uncertainty and the inevitability of the unexpected, you still need to prepare as best you can.
It is essential to consider the above factors. When you fail to address these issues, your business might experience challenges you cannot handle, and you run the risk of closing down. Ensure that you do everything you can to prevent these mistakes. Take the time before launching your start-up to put in the proper research and thought into your idea. That way, your energy and passion can feed into driving progress and making your business and your product better, rather than into putting out fires along the way.