Starting your business can be an exhilarating yet terrifying process. While it offers the opportunity to be your own boss, it also presents various challenges and, not to forget, the risk of loss. If you are starting a new business venture or even just thinking about starting one, you will likely make some mistakes along the way. But, the essential part is to learn from mistakes and experiences. And not just your own.
If you educate yourself about the common pitfalls of starting a new business, you can avoid some of the mistakes that business owners make in the beginning. Sometimes, learning from shared experiences builds awareness and can help you avoid mistakes or incur a loss at a nascent stage in your business. Therefore, we have compiled a list of six common mistakes entrepreneurs make to help you steer clear of bad decisions and make the right choices to grow your budding company.
- Lack of Market Research – A classic rookie mistake in entrepreneurship is a lack of market research. Before you begin, you must spend time on primary and secondary market research. You may end up launching your business targeting the wrong audience or creating a service that does not appeal to your customers. Market research can give you valuable information about your target market and their expectations. It can help you define the service or product quality, pricing, features of competitive brands, and branding vehicles.
- Lack of Business Plan – Going from business idea to business plan is a long and arduous journey. But creating a detailed business plan that outlines your objectives and business goals is imperative for success. Starting a business plan helps you determine essential details such as operating costs, demand projections, unique selling propositions, organizational structure, and funding requirements – among many others. Without a business plan, you may work with incorrect estimates and end up wasting your money.
- Poor Financial Management – Finance is the bedrock of any successful business. From the get-go, it is essential to plan your finances to ensure that your business always has sufficient funds whenever required. In the beginning, your business will likely not make any money or could make lesser profits than you would hope. In case you are in need of funding, make sure you have a list of backups to fall on. Reliable friends, relatives, and investors are always good to know, but if that’s not an option for you, then consider a loan for self-employed to ensure that your family is provided for and that your employees are paid their salaries. With the advances in the fintech industry, online lenders such as KreditBee had made it very convenient for new entrepreneurs to get quick funding lined up with hassle-free documentation and almost instant approvals that happen in less than 15 minutes or so.
- Ineffective Marketing Strategies – Small business owners are often reluctant to spend on marketing. However, a lack of investment in marketing can be fatal for a new business. Design a detailed marketing strategy that can help you reach your target audience. Use a mix of online and offline marketing vehicles to reach the maximum number of customers at the minimum cost. Experts also suggest starting your marketing campaigns well before you open doors for customers.
- Not Hiring the Right People – Good people make a good business. It is a cliched advice, but an essential one. Finding the right team to work with you can help your business survive and grow despite challenges. On the other hand, hiring the wrong people can be detrimental to any business. Think about working with freelancers, subcontractors, and part-time employees in the beginning. It reduces costs and gives you much-needed flexibility. You can hire full-time employees once you have a steady stream of clients. Hiring later rather than sooner also gives you clarity about the skills and experience you need in your team.
- Not Adapting to Change – The business environment can be dynamic, and all businesses must adapt to change. Consumer demand keeps changing, and your service or product must change along with it. Constant market analysis and keeping your ear to the ground are essential. Reacting to change with agility and a proactive attitude is also crucial. Stay up-to-date with the latest industry trends and competitors’ strategies.
Running a business is a continuous process and not a one-time event. You should strive to make informed decisions based on research, experience, and industry trends at every step. Do not be afraid to take risks, but avoid reckless moves in business. Plan and think about details such as marketing resources, operating costs, and financial management for the company. If you keep the above list in mind, you can avoid mistakes business owners make in their first year.
Author Bio: Tanvi Kaushik specializes in Content Marketing and works with the Digital Team at KreditBee – India’s fastest personal loan platform where self-employed and salaried professionals can easily avail of personal loans in just a few minutes when in need of quick funds. Tanvi writes to-the-point articles on personal finance and budgeting which are truly appreciated by her readers. She is committed to making money matters easy to understand even for the layman. Her commitment to her work doesn’t stop her from pursuing her hobbies of hiking, trekking and going on adventurous trips.