You might be one of those people who from a very young knew that they were meant to start and run their own businesses. Others start their businesses because of their current situation in life. It could be a lack of satisfaction in a career, a loss of a job, and challenges of parenthood or retirement. Businesses are also started out of curiosity; is entrepreneurship a right fit for me?
There are many advantages to starting a business, just as there are risks as well. The bottom line is entrepreneurship is still very attractive. All business people have a story, and in it, there are lessons learned from mistakes made, and victories won.
Some minor mistakes will allow you to bounce back with ease, but some can cripple your dream. The latter should be avoided at all costs. Since experience can be a ruthless teacher, we have rounded up eight mistakes that you should steer away from when starting a small business.
1. Skipping the business planning phase
Making a business plan is a tedious process, but without it, you will be running it in the dark. Fantastic business plans should comprehensively cover idea research and your business’s market potential. With proper idea research, you will be sure about problems your service or product is designed to solve, to give you clarity and focus when running the business.
2. Not having a sound financial plan
A financial plan will ensure that you have enough operating and marketing capital to launch out. With a plan in place, you will also not make the error of injecting too much money into the business in its baby stages without giving it enough time to grow organically.
A good financial plan will also keep your business off high-interest debt like credit card debt. Credit card is often a familiar source of funding for a small business that without a sound financial plan keep getting caught in financial jams.
Banks are now paying attention to small business owners, and banks like Bank of America and J.P Morgan Chase have funds earmarked for this kind of business lending. The U.S. Small Business Administration also has loans that they guarantee to help small business get funding from banks when they require it the most.
3. Not seeing your marketing strategy through
Besides the business plan, you should also come up with a good marketing plan during your planning phase. A marketing plan will not only help you launch off in the right direction but will keep you on the right track in your operations.
Many new business owners without a marketing plan tend to focus more on product development and forget their sales and marketing. This means that as the months go buy, they will make fewer sales and the business will stagnate.
A new business is like a light bulb in a dark room. You need to switch it on for the other people not only to see it but also benefit from its light. You can turn on your business’s light through aggressive marketing and advertising.
Marketing in business can take on many forms. You can use traditional modes of advertising, like TV, radio or print advertising. You can also do internet marketing and word of mouth referrals. The most suitable form of advertising highly depends on your type of business, your budget, and your target audience.
4. Having too little or too much help
Most new small business owners start out as a jack of all trades, dealing with each and every need the business might have. Some will not even take on a helping hand even if their budgets allow for it. Sometimes taking personal loans if you have a good turn over can help. A business owner can take help from credit matching service, view realistic loans to find the fastest lending sources.
The problem with this approach is the associated low level of productivity that will affect all facets of the business. A business manager has to learn to delegate for increased productivity.
Work needs to be divided to ease the pressure so that you the business owner can concentrate your strengths on matters that require it the most. You can, for example, have a banker, accountant or attorney you can turn to when their services are needed.
5. Hiring the wrong people
When enlisting help, you also have to ensure that the people you are bringing into your business enjoy their work and are great at teamwork. Famed restaurateur and Top Chef judge Tom Colicchio say “We’re looking for that natural host, the person who is always looking to make people happy and who doesn’t find it to be a chore.”
Your employees have to be fantastic at customer care. Did you know that 97% of customers globally say that excellent customer service is what fuels their loyalty to a brand? A significant 60% of these customers also say that they have disengaged from business due to poor customer care experience.
And if you are going into business with a friend, make sure that it is a friend who you can iron out hard issues with. Ensure that you have legal documents in place too. Once the business is up and running and making some good bucks, you also need to learn to let go of the reins and allow in employees with the capability, skill and experience for the next growth level of your company.
This will open more doors for your business and prevent good opportunities from slipping through your business’s fingers.
6. Not having an online presence
All great businesses today have an online presence. Research shows that 89% of all consumers today use search engines to find products and service before purchase. Companies are making a killing on social media platforms like Twitter, Instagram, Facebook or Snapchat.
Websites, blogs, and email marketing are also fantastic opportunities not only for revenue making but to also make sure that you are reachable and easy to find. Today the eyeballs are no longer on the yellow pages but on search engines and social media engagement.
7. Not understanding your market
Market research is vital to the business planning stage. It will help you pinpoint who your ideal customer is so that your marketing and advertising can target them better. Understanding the industry, you are launching in will help to keep your business afloat.
It will also help your business more if you immerse yourself first in the market you are launching in so that you can figure out what facet of your service or product people are willing to spend their hard-earned money on. This will, for example, help you anticipate and satisfy all your customers’ needs in advance to ensure complete customer satisfaction.
8. Undervaluing your service or product
A small business owner may at times suffer from a lack of confidence and under price an otherwise top-notch quality or product. A lack of market research can also lead you to make poor pricing decisions leaving your business vulnerable to losses. Identify your entry price range to steer you away from frustration and possible closure of your business.
Avoid these mistakes above, and soon you will enjoy not only being your own boss but the benefits of a long-lasting entrepreneurial life.