Starting a business is a great feat, regardless of the industry you’re in or its size. Making mistakes is quite common and shouldn’t be a major problem if you choose to learn from them. Still, you can choose to avoid some of these mistakes, as they can have far-running mistakes that can cost you your business or leave you in massive debt. Reading through this list of mistakes that first-time entrepreneurs make is a smart and proactive step on your part. You’ll be learning from the mistakes that pioneers have made and will, therefore, be armed with knowledge in the face of difficulty and better placed to make the right decisions.
Failing to plan
You may have heard this thousands of times already, but there’s a reason why it makes first on the list. Without a business plan, starting your business will be many times harder than if you sat down and built one. With a plan, you can consider the most minute of details, which are especially valuable when crafting your initial budget. Moreover, without a business plan, financiers and investors won’t take you seriously, and obtaining funding and credit will be next to impossible. Failure to plan will lead to costly errors, and inevitably, a false start.
Today, you don’t have to struggle with a 20-page traditional business plan. There are resources online that can help you build a comprehensive business plan in less than a day. First, research what you’ll need, then visit a website like bp1ans.com, where you’ll find samples and templates that can guide you.
Failure to build a robust brand from the beginning
Branding will help you build and maintain long-lasting and mutually beneficial relationships with suppliers, customers, and distributors. Your business brand should have all the visual attributes from the beginning – a great name, logo, fonts, colors, plus all the right values (honesty, trust, and reliability). Without these, running your business will be infinitely harder, and so will your marketing efforts.
Use free tools online like Canva to help you design a great logo, banner, and other visuals for your brand, then team up with a reliable team to place it on your premises or vehicles, such as https://www.craftsmenind.com/.
Forgetting about market research
Your product may be the perfect combination of attributes, but if the market doesn’t need it, you won’t be able to sell it. Businesses are built primarily for profit, and acceptable levels of demand will be crucial to keep your young business running. Asking friends and family for their opinions is a great idea, but they will often give you biased opinions that are inaccurate. Many small businesses go ahead and launch themselves into an uncertain market and struggle to compete due to a lack of knowledge on their target market.
Thorough market research is mandatory for business success, and there are hundreds of resources online you can use for it. Search based on your industry and area of interest, followed by the demographic you believe will benefit most from your business. Secondary resources like Google Trends and Census data have information that’s ready for you.
Choosing the wrong business unit
Is your business a sole proprietorship or a partnership? Should you form an LLC? If you’re working with a group of people, it’s crucial to communicate about the deal at length to ensure that everyone’s concerns are heard and considered before you file any documents. Choosing an LLC is an excellent option because your business will be a separate legal entity from you, and you will, therefore, not lose your personal assets in case it’s liquidated. However, starting an LLC has a lot of legal implications, and you need to draw up a lot of legal articles with the help of an attorney. There are merits and demerits to every business unit, and despite all these, there will be one that’s best suited for your business in the long run.
Talk about this issue with a professional in business or company law, such as an attorney or accountant. They will help you analyze your business of interest in-depth and offer expert advice on the best way to proceed.
Rushing through the hiring process
As your business grows, you’ll find it difficult to run all the parts of your business – financing, bookkeeping and accounts, quality assurance, customer care, logistics, etc. Waiting to hire qualified help can be the biggest mistake you can make because balancing all the functions of a growing business by yourself can cause irreparable damage to the business and cause intense fatigue and burnout. The last thing you want is burnout when your business is in a growth spurt, as this will be the best time to rake in loyal customers and increase product quality and attributes. Again, you don’t want to hire the first candidate that walks through the door, which is why you need to identify when you need assistance as early as possible. Hiring a qualified candidate is better done when you’re not overwhelmed with calls and unfinished work from the previous night. Choosing the wrong candidate can mean more work in training and orientation, which is the opposite of what you’re looking for.
Get help for the smaller, more mundane tasks from the very beginning. Delegation is key for your well-being and that of your business. As your business grows and can sustain the budget of more long-term workers, take time to sift through resumes and identify an experienced candidate that’s a perfect fit for your organization.
Not having an online presence
Today, customers will trust a brand that has a robust presence online better than one that’s nowhere to be found. Every business, regardless of age, needs a website detailing its mandate, services and products, and contacts. Even better, get yourself pages on all social media platforms where customers can interact with you, offer feedback, and obtain information about upcoming sales, discounts, and other offers.
There are hundreds of website builders that will help you create and launch a successful, intuitive, and appealing website for as little as $29 per month. If you want e-commerce capabilities, you can get those from providers like Shopify and Wix. You don’t need any technical expertise with website builders, as they are designed to use drag and drop for website design rather than code, and are remarkably user-friendly.
Underpricing your product
Underpricing is an impulse most first-time business owners use to entice customers and hope to maintain their survival for at least the first few days. However, if your price isn’t sufficient to cover your overheads (utilities, rent, monthly fees for websites, and permits), your business will suffer regardless of the customers you bring in. Moreover, customers may perceive your products as being of low quality if they are worth way lower than the industry standard.
Your product or service price should be guided by what others in the industry are offering. Also, consider your intended profit margins and financial goals and price your product accordingly. Instead of slashing the price, offer a good price, and find innovative and unique ways to increase its value and justify its price.
Failing to invest in marketing
Marketing is a must for any business. Besides, how will your customers know that you exist if you don’t put yourself out there, tell them about your products and services, and convince them to try them? Some small business owners perceive marketing as a preserve of larger businesses with a sufficient capital base. Without marketing, it will be impossible to have people talking about your brand, create awareness, or generate buzz.
Understand how crucial marketing is for your business, and that it’s not an expense, but an investment that will generate massive returns. Depending on your industry and goals, you should expect to spend 2-20% of your revenue on marketing. If you’re on a shoestring budget, there are still many options for you to try on your own, such as a business website, social media, SEO, email marketing, and other low-cost options.
Right after failure to market is poor marketing strategies, which are worse than not trying at all because these consume funds and generate nothing in return. Poor marketing campaigns are those that don’t show a change in sales after months of using them and only seem to put a dent in your funds.
Understand your target market and know what truly appeals to them. If your target market is people interested in fitness and diets, you may not find them seated in front of a TV, but probably reading through a health and fitness magazine or blog, a YouTube fitness channel, or a gym in your area. If you’d like to use social media, hire a marketing firm for multichannel management to ensure you get the most out of your sponsored pages and tweets.
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