Starting a new business has never been more accessible. Unfortunately, most new businesses fail within the first three years. Largely, this is down to a lack of planning and research. Just because a business launch is easier than ever, actually running a business still requires hard work and discipline. Understanding where new business owners most often go wrong can make it much easier to avoid those same mistakes. If you’re considering the launch of a new business then here are some of the most common mistakes that entrepreneurs make, and what you can do to make sure that you don’t fall into the traps that will make business failure much more certain.
The modern entrepreneur can make one of two fundamental mistakes when they launch a new business. They either spend too much money and can’t maintain that expense, or they spend too little and leave themselves without vital resources. Understand your financial commitments and manage your cash flow like your business depends on it.
Understanding the Competition
Even if you think that your new business is a unique product that has no competitors, there are always going to be businesses working in the same space as you. Make sure that you take the time to research actual and potential competitors and learn as much as you can about them. The more that you know what your competitors are doing right and wrong, the easier it will be to leverage your position into even a crowded marketplace.
Optimism and Guesswork
Data is more than just a business buzzword of the digital age. The analytics that you get from your business platforms is of huge value and can take away much of the guesswork when it comes to making business decisions. Reognized expert Peter Peterka says to look at methodologies like the 6Sigma approach, which “…results in more predictable and profitable business processes.” Never assume that data is only for big brands. Even SMEs that are run for your home office should be using real-word data to guide all business processes and decisions.
There’s a good chance that you will need to hire people to build your business. In the early days of your launch when finances are tight, you may be tempted to cut costs and hire cheaper team members. This will have a long-term negative impact on your brand’s potential to grow. Low-cost hires are rarely worth the time that you take to train them. Always look at your skill gaps and fill those gaps with experienced hires.
Lack of Goals
Goal-setting is proven to be incredibly effective at improving productivity. As part of your business plan, you should have a clearly defined set of goals that can be easily measured. The more that you have a direction to move in, the easier it is to move in that direction. If you have intangible goals like wanting to make more money, then you will struggle. Approach each goal as a separate entity and break down your pathway to meeting those goals. The more defined your route, the easier it is to meet your goals.
Lack of preparation can destroy your business before it starts to gain traction. Take your time to get things right before you launch, and be flexible enough to make changes if your business is not moving forward in the way that you hoped. Plan well, and your business could become the global brand you’ve always dreamed of.
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