Getting the idea and taking the decision to start your own business is a simple one. Saying you’re going to start a business is good to talk but taking actual steps towards it and turning it into reality is where things get tough.
Nearly half of new businesses don’t make it past the first five years before crashing down. The number one problem most startup business faces is the lack of commitment. Starting a business requires 100% commitment because there will be many obstacles to overcome that’ll take a lot of work, time, and effort.
You will have to make some sacrifices for your business to succeed, learn, and steer clear of new small business owners’ common mistakes. Read on for a list of top mistakes young entrepreneurs make that you should avoid.
1- No Advanced Planning
Don’t just wing it; that never works. Instead, it would be best if you had a bulletproof business plan before making any decisions in your business. A strong business plan includes everything from financing your business to your marketing strategy.
This plan carves ahead the path for your business and helps you make the big decisions. An on-point plan is what gets you loans and draws investors into your business.
2- Inefficient Market Research
It is essential to be sure your product or service is worth any value before investing time and money into it. Most startups don’t amount to much fail because they got an idea and just rushed into it. The right research to if their idea is desired in the market or not wasn’t done.
And then again, you can have a great idea but don’t market it right or have nothing special on your competitors. Study your competitors closely, take notes and learn their marketing strategy. Find out what works for them and do it, find out what they did once and didn’t repeat, and avoid it.
3- Undefined Target Audience
You can’t make everyone happy, and you shouldn’t try to. If you try to market your business to everyone, it will lose its value and be all over the place.
By running accurate marketing research, you’d be able to define your target audience and the right marketing strategy to use, whether it’s online, through the newspaper, or even handing out flyers. Once you’re settled on your target, it’ll help you, in the long run, add to and improve your product according to their needs and desires.
4- No Business Goals
This doesn’t mean predicting the future of your business, but it knows what you want for it. Unfortunately, many entrepreneurs that don’t have a vision set for their business lose focus and give up eventually.
Having clear goals set for your business (whether they’re annual goals or five-year goals) will not only motivate you and help you draw out your steps but will also push you through the rough patches.
5- Use your home address as your business address
Studies have shown that 52% of small businesses are home-based businesses. This may seem like a logical decision because no one wants to waste money on office space with limited resources initially, but is it really a good decision?
Customers want to believe that they’re dealing with a reputable company, not someone who’s brewing a product from their living room. Therefore, no matter how good your product/service is, it would be best if you had the reputation to back you up. This doesn’t mean rent a prestigious office; it just means you need an alternative address to use instead of your home address.
That’s where virtual mailing address service comes in. It offers you a virtual mailbox to use for business mail correspondence with customers, partners, or investors and a real street address to show off as yours. So you can have a business address in New York, California, or wherever you want.
With a virtual mailbox service, you’ll receive all your mail digitally online, not needing to clutter your office with contracts, invoices, or other mail. So not only will you have a prestigious office address to market on your business card, website, or social media, but you’ll instantly be able to respond to customer mail.
6- Having No Website
Having a website, no matter how small your business, is vital. According to an online survey, only 51% of small businesses have websites meaning almost half of small businesses are off the radar. Your website is your marketing platform and represents your business.
Not only does it build up your customer’s trust in what you’re offering, but the internet is the number one source consumers use when searching for a product/ service. So even if you run a one-person show with a local business, your online presence is everything.
Creating a website is not as hard as it used to be, with the help of companies like Wix, Weebly, and many more. You’d be able to set up, design, and use your website for a convenient monthly fee.
7- No Financial Plan
Financing a small business can sure leave your pockets empty and possibly your bank account. But, before getting into anything, you need to have enough capital and a little more to fund your business.
When it comes to money, always plan to have a close eye on cash flow so you’d always be prepared for rough times. Don’t wait until desperate times to seek a loan or funding. By setting a financial plan, you can set funds for a crisis before it happens. Another concept that most small businesses tend to overlook is spending too much or too little.
Sometimes, businesses are in a rush and want to start big, so they spend too much money on pricey equipment and tools they don’t necessarily need. Then, when it’s too many expenses, the businesses crash. Other times, startups know they have limited funds and are very careful with spending, maybe too careful. As a result, they don’t invest enough in their business and don’t meet market standards.
The solution to financial problems is setting a budget and planning.
8- A Jack of All Trades
Whether you’re trying to save money at the start or want to do everything yourself to make sure it’s done right, being a jack of all trades doesn’t end well.
Instead of focusing on your business’s core values, you’re coming up with a marketing strategy and trying to understand QuickBooks. Unfortunately, this can negatively impact your business and cost you money.
Start by delegating small tasks over bookkeeping, design, or online marketing. You can work with freelancers or have remote employees. However, waiting until you’re in desperate need of help will only guarantee you hire hastily, which is not what you want. Instead, take your time in the hiring process and make sure you got the right person for the job.
However, having a good idea of all business aspects isn’t wrong either; it’s encouraged even. You should always be up to date with marketing and accounting basics, even if you have people for it.
9- Thinking your product isn’t good enough
When you’re new in the market, it’s normal not to be too confident about your product/ service. As a result, you may undervalue your product and sell it for a low price, leaving you with no profit. If you think it’s okay not to have profit in the beginning, you’re wrong.
By doing your market research, you’ll find competitive prices and be able to define the right price for yours. But, of course, when calculating the price of your product, you need to leave room for profit. So instead of selling too cheap, think of what your product has that justifies a better price, making it unique.
10- No Telephone Number
Don’t just have your customers reach you by a support email on your website. If there is a problem, your customers want to get an instant solution, not wait a few days to reply.
One of the most important factors for small businesses is customer satisfaction. No matter how great your product is, your business won’t thrive if your customer service is bad. Set aside a direct business phone number other than your personal number for investors or customers to reach you easily.
Sometimes even the smallest things can make all the difference with your business. It’s alright to make a few mistakes in the beginning. You learn from them, prevent them from happening again, and use them to make your business stronger.
And most importantly, pick up a few tricks from those before you and avoid their common mistakes.