Launching a new business is enticing in many ways but it’s also incredibly risky. Especially when about half of all businesses fail within the first five years. Starting and running a small business is incredibly complex and there are many challenges to navigate; to make it all a little bit easier, here are some key mistakes to be aware of and avoid to ensure long standing success:
1- Inaccurately forecasting your product/service’s demand
Many small businesses fail because the entrepreneurs overestimate demand for their proposed offering. Just because you love getting organic puppy ice cream for your canine companions doesn’t mean everyone will be wiling to pay the price for these products.
It is therefore worthwhile to invest extra time into research to more accurately gauge the likely demand for the products you plan to centre your business around. The demand is what will dictate your business success, so lessen some of the risk of launching your business venture by being sure people will want to invest in it.
2- Not establishing a clear competitive advantage
The market has become saturated as new small businesses are launched daily. Therefore, if you are entering a busy competitive market, you must have a distinctive and compelling competitive advantage to set your business apart from everything else that’s already out there.
Not only do you need a great product or service, but you need to think about why customers should choose you not anyone else. This can take many shapes and includes price, décor, atmosphere, service speed or quality and many other factors.
Without a competitive advantage, your businesss will get lost among all the other jumble consumers are confronted with. Make it very clear and easy to understand what your business offers and why your business is the right choice.
3- Not accounting for the cost
Starting a business is incredibly expensive. When you are forecasting the costs and expenditures, always overestimate because things usually end up costing more than anticipated at first. When this happens its always better to be prepared for the worst than to come up short.
Remember your personal costs as well and really try to get a well-rounded picture of the financial burden starting a business will bring so that you can prepare accordingly.
4- Trying to do it all yourself
Everyone has their weaknesses, whether it be accounting, organisation or something else. When you are starting or running your business it’s important to be aware of the things you aren’t great at and don’t be afraid to get help. You might not be able to afford hiring an accountant, but don’t hesitate to ask your accountant friend for some help.
Similarly, with a load of tasks on your plate, it can be easy to push your least favourite tasks aside for later – don’t! Neglecting important jobs that you don’t like can make you dread them more, making it more difficult to attack these tasks later on. Hold yourself accountable and get the job done.
5- Identifying the KPIs
Before you start your business you should have an in-depth understanding of your key-performance indicators (KPIs), or those statistics and figures which are most important in understanding your business’s success.
The numbers give you a straight-forward understanding of where your business is at and what needs to change for improvement. Bad KPIs let you know that you need to take action. But for them to be useful to your business you need to have identified the most relevant ones and continuously measure them.
Launching a successful business venture is greatly aided by luck and timing, but avoiding these five key mistakes is another way to aid good fortune in your future endeavours.