5 Pitfalls to Avoid When Starting a Business

Starting a business requires a lot of hard work, money, and preparation. Unfortunately, all that blood, sweat, and tears will be wasted on a failed business if you don’t avoid some of these common—and devastating—pitfalls. Whether you are an experienced entrepreneur or a newbie, beware of these mistakes so you can ensure the success and vitality of your new business venture.

1. No Business Plan

Just because you have an idea, that doesn’t mean you have a plan. And without a plan, your business isn’t likely to survive for very long. A business plan will help you determine your goals and vision for the company, the resources you already have, and how you plan to allocate them in an organized model. This will involve outlining your financial needs, deciding on your niche, and planning out your marketing strategy.

How you want to use your plan will also affect its focus. For example, if you want to show it to potential investors, your plan should emphasize the financial aspects of the business. In other words, how your company will make money, what your marketing strategies are, and plans for equity sales.

No matter what you decide to use it for, it is imperative that you have some sort of business plan in place to direct your company and increase its chances of survival. Because unless you can fund the entire venture yourself, you will need a plan to interest investors in providing capital to get it off the ground in the first place.

2. Lack of Marketing

One of the easiest mistakes to make when starting out is to skimp on marketing. This is understandable, considering how much time and money it already costs you to start your business. However, if you fail to market, you essentially doom your business to failure from the start. If customers don’t know who you are, or they can’t find you, how do you expect to generate revenue?

That is not to say that you have to break the bank in order to get your name out there. It is, however, necessary to invest some of your finances into a marketing campaign. Develop a plan from the beginning. Determine what your strategy will be and focus on making your campaign successful—even if it is relatively small at first. Whether you target online advertising or other methods, make sure you are doing something to get your name out there and begin building your brand.

3. Inflexibility

Most businesses change over time. This is a natural process that occurs as a business grows and develops. As a business owner, it is important that you are aware of this and leave some wiggle room for your company. It can be difficult, sometimes, to be flexible. Your business is your baby and you have a certain idea of what it will look like and how it will operate.

However, running a business, like raising a child, means you often have to allow it to grow and become something different than you had envisioned. This doesn’t mean that you have to sacrifice the original idea completely. But it does mean you should be open to tweaking that idea and willing to evolve together. When you do this, you and your business will thrive.

4. Ignoring the Customer

The worst thing you can do as a business owner is ignore the customer. The customer is what gives life to your company. Failing to accommodate their needs and tailor your service or product to them will only hurt your business.

Find out what your target market is and work to provide that group with a product that is valuable to them. Be aware of the market response and be willing to adapt to meet those needs. It doesn’t matter how great you think your product is if no one wants it. You have to come to the customer and prove your value as a business. Recognize their needs and strive to meet them and you will have a greater chance of success.

5. Hiring too Soon

When starting a new business it is common to jump the gun on hiring employees. Chances are you have limited funds with your startup, and adding to your overhead costs with additional employees can quickly sink your business before it has a chance to take off. Be prepared to do most of the work yourself for a while before you consider taking on help. By doing things yourself you save money on overhead costs until your company is more developed.

A word of caution: though hiring too soon can bury your business prematurely, trying to do everything yourself can be equally detrimental to your success. Seek balance in your work. You should be willing to put in long hours, but also recognize when you cannot (or should not) do it all. Identify areas where you can outsource the work for cheap. Then, when the time is right, take on employees.

Author:.

Jake Magleby has written extensively about effective marketing, sales, and financing strategies to help small business owners succeed in a fast-paced and ever-changing business world. He finds inspiration from successful business leaders like Richard Schaden. He also has an interest in education and development and highlights his expertise on his blog, Franchise a Busines.

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