Many people have the dream of starting a business in their lifetime. Among these, there are those with solid business plans to actualize their dreams, while others have a faint outline of their vision. Whatever the case, starting a new business is tough. According to one survey, only half of new businesses survive past the five-year mark. The same study shows only one in three businesses get to the 10-year mark.
If you have plans to set up a new business, these numbers shouldn’t dim your ambition. Instead, you should learn from the mistakes other entrepreneurs have made when setting up their startups. Below is a highlight of some of these pitfalls that you should avoid.
Misinterpreting the Market
One of the easiest ways to guarantee success in a new business is carrying out thorough market research. It gives you the pulse of the market and a realistic picture of what to expect. Many entrepreneurs fail to maximize market research leading to a misinterpretation of the conditions.
From poorly gauging demand, little competitor analysis, poor cost estimation to wrong demographics targeting, misinterpreting the market will have a devastating impact on a startup. It is a major reason for the failure of such new businesses.
Taking Too Long To Launch
After clinching that brilliant idea and analyzing it carefully, you have to set a tight timeline for launch. The modern business environment is fast-paced and ideas quickly go out of date. For this reason, you should not wait too long to launch your startup while awaiting the perfect moment.
The most successful businesses started in their raw form and the owners tweaked things as they moved along. Customer feedback will help you improve your venture and it is more effective than waiting for perfection.
Skipping the Planning
Planning a business is not easy and many entrepreneurs opt for the easier way out. They skip the planning and start the venture anyway to see how things will pan out. This inevitably leads to disastrous effects.
A successful business will have a solid plan behind it and this includes the overall plan of action, a marketing plan, and a financial plan.
Failure To Pay For Expertise
When starting a new business, money is tight but you shouldn’t compromise when it comes to hiring the best professionals. You can’t do everything in your business and if you want this venture to last, you have to pay for expertise. Relying on friends or family to work in your startup is simply setting yourself up for failure.
Scaling Too Fast
The dream of every entrepreneur is to grow a large business but you have to be patient for this to work. Many startups scale too quickly too soon, only to buckle under the pressure of new expectations. After raising cash for your business, remember to stick to your original plan and avoid the temptation to expand unnecessarily.
As an entrepreneur, you come into the business with a lot of enthusiasm which is a great idea. However, you have to give space to your employees to utilize their skills. Micromanaging might look like a sure way of growing your idea but this will backfire.
You have to learn to delegate and allow professionals to do their thing. This will save you future costs of repairing the damage you might do.
Starting Without an End in Mind
Starting a business comes with thrill and expectations. It is a high that blinds many entrepreneurs from looking beyond the present. Come business ideas work out better than their creators expected but unfortunately, lack of vision leads to failure. When creating your business plan, consider all outcomes and prepare for anything that might come.
Lack of Identity
When thinking about a new business, it is important to consider what it stands for, the goals, aspirations, and core values, among other things. These things, in combination, build your company’s identity. In a highly competitive market, the only way to attract customers is by standing out from the crowd. This has to start right from the business planning stage.
Rigidity About the Idea
No doubt growing one’s idea into a successful business is what every entrepreneur wants. However, you have to be flexible about your idea for it to work. When you bring in new people into your business, they will propose new ideas and you have to listen and consider these opinions.
Rigidity and stubbornness are the Achilles Heel of many entrepreneurs and have killed many ingenious business ideas.
Neglecting Legal Protection
Anything can happen in business and with this in mind, it is advisable to take affordable legal protection. You have to consider issues like copyright, employee contracts, founders’ agreement, privacy policies, terms and conditions (T&Cs), among other tools to protect yourself and the business. These can save your business in case of lawsuits.
The contemporary business environment is tougher than ever before. For your startup to succeed, you have to plan carefully, watch the market closely, prepare for any eventuality and remain open to new ideas. You should also invest in expertise and grow your business at a sensible pace. These few tips can save your beloved business idea.