Starting a business is easy. Starting a successful business is not. A popular argument against getting into entrepreneurship is the idea that 90% of new businesses fail within the first five years. With such a small chance of success, how can you possibly get your business ideas off the ground?
Not every new business is destined to fail, especially if it’s built around a very good idea. Simply avoiding the pitfalls that the ill-fated 90% of businesses blindly run into will give your business a real chance to make a difference, not just surviving the market, but thriving.
1. Not Understanding the Target Market
Anyone who’s vaguely aware of basic economics will understand the concept of Supply and Demand. Consumers demand a certain product, and businesses provide a corresponding supply. One common mistake that budding entrepreneurs will make is providing a supply to a market in which there is no demand; in other words, nobody wants to buy what you’re selling.
This disconnect between business and consumer could be caused by a few different reasons: You’ve misdiagnosed the customer’s need entirely. You’ve correctly assessed the customer’s need, but have provided an incorrect solution.You know both the need and the solution, but have failed to market it in a way that makes sense to the customer. Be sure to verify every step of the entrepreneurial process. Working out the kinks of your business before launching will save you time, money, and hours of sleep as your business develops.
2. Not Adopting a Mobile Platform
Speaking of marketing, it is crucial to your company’s survival to reach out to your customers where they are. Simply building a business will not guarantee that customers will flock to your door. To build brand awareness, new businesses needs to go to customers to where they are.
Adopting a mobile platform is a relatively cheap, and extremely easy way to do this. App makers can create a digital interface that will give you a leg up on the competition. You can manage customer relationships, process payments, and coordinate with employees and partners.
3. Practising Bad Accounting
Another reason new businesses tend to go under is the idea that one person can do it all. The stereotypical entrepreneur has taken business classes, gotten real-world experience, and considers himself somewhat a savvy expert. Unfortunately, while the entrepreneur might have amazing vision and an excellent work ethic, he may not be as well-versed in accounting.
Everyone wants to be a CEO, but fewer want to be CFOs (chief financial officers). Make sure to get someone on your management team who can keep track of the books. A popular method is to hire an outside accounting firm to manage the accounts; however, going blind with your money is never a good idea—especially if you’re a young company steeped in debt.
4. Neglecting a Cash Cushion
Speaking of money, it’s never a bad idea to have some cash on hand. You never know when you might need extra funds for a filing a lawsuit, launching a new product, losing a client, or conducting R&D. Having liquid funds on hand will always be a better option than going into future debt. Joseph Carney enjoys writing on home improvement, business, and health-related topics. He also occasionally writes for, App Express.
Generally, you’ll want a contingency fund that will cover three to six months of operating expenses. To calculate your contingency fund, break down your fixed and variable expenses over the last 12 months. This includes production costs, overhead, etc. Divide your total expenses by 365 to get your daily expenses, and plan your contingency fund accordingly.
5. Being Stubborn
Success can be dangerous if you don’t know how to use it. Given the dynamic nature of the market (changing customer preferences, advancing technology, fluctuating economy, etc.), what worked for your business one day may not work the next day. Failure to adapt to change as a business will negate all the work you put in.
As a business owner, your biggest responsibility is to be willing to pivot. Find ways to analyze your customers’ behavior, your competition’s strategies, and the market need for your business. If you don’t feel that you can be the best—or at the very least, competitive—in your target market, it might be time to change, and start the validation process all over again.
For better or for worse, entrepreneurship is terribly exciting. And while you can’t be prepared for everything, being prepared for the important things and avoiding common mistakes is the best way to ensure your business’s success. learn digital marketing course in delhi.
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