Starting, managing and growing a small business is challenging. That’s why many small businesses fail in their first few years. If you understand how to manage your business and what mistakes to avoid, you will have a greater chance at success.
1. Not understanding the market
Before going into business make sure you understand this very important question – Is there a want or a need for my product or service?
You make think you have a great idea for a business, but just because you think it’s great does not mean that others will agree. When you have developed a product or service, test it first to see if people are willing to spend money on it. Do your research before sinking a lot of money into an idea that will not succeed.
2. Giving up too early
Running a business is tough, especially in the early days when you are still working out the kinks. Gaining traction takes time and you will definitely run into roadblocks in the beginning. Be patient and work hard, success does not come overnight.
3. Ignoring the competition
Never ignore your competition. Before you start a business, you should have a good understanding of your competition. If the market is too saturated, you may not be able to sell your product or service. Make sure you understand what your competition is selling and how their pricing is set up. You’ll need to find a way to differentiate yourself from your competition in order to be successful.
4. Skipping the business plan
Never skip out on making a business plan. Having a vision is great but you should take it a step further and create a written business plan. Create a marketing plan and a financial plan to have guidelines in place for managing your money and gaining new customers. If you need help creating your business plan, the Small Business Administration has some great resources:
5. Running out of money
Starting and growing a business takes money. There’s no denying that. On top of that, most businesses don’t make profit in the beginning. Make sure you have enough funds to keep your business afloat until it becomes profitable. Also, be sure that you have enough money saved up to support yourself and your family while your business is gaining ground. Having a solid financial plan in place will help you avoid running out of money before you succeed.
6. Doing it all yourself
One common mistake people make when they are starting out is trying to do everything on their own without the help of others. This may not be wise and could set you on the path toward failure. Have a business mentor to help guide you in building your business. Find an accountant to do the bookkeeping. Hire an assistant to do the mundane tasks that are taking up your valuable time. You can’t do it all alone! Everyone has different strengths and weaknesses – capitalize on your strengths and delegate the tasks you’re not good at to someone else.
7. Being unwilling to change
In today’s fast-paced world, you need to be willing to evolve your business. Whether it’s taking advantage of new technology, developing an improved product, or testing out a new marketing strategy, you need to be constantly evolving and improving in order to be successful. Business that remain the same won’t grow.