Starting a new business can be a risky venture. Very few start-ups make it beyond their 3rd year, usually as a result of making the same old mistakes as so many businesses before them. Here are five of the most common mistakes that can cause businesses to fail and which should be avoided if you are involved in a start-up enterprise.
- Misunderstood the market
Just because you and your nearest and dearest think your business idea is a good one, does not mean that the world wants or needs the product you plan to offer. Before launching into business, it is important to research the market and ensure you are going to be offering a popular product at the right price to ensure success.
- Couldn’t cope with the paperwork
Business owners and entrepreneurs are not necessarily born administrators. Ignoring the paperwork and hoping it will go away is not sustainable behaviour, and with the current spotlight on data protection, keeping the right paperwork for the right length of time is critical to ensuring your business doesn’t run into difficulties later on.
As well as the mechanics of accurate record keeping, the physical storage of documents and paperwork can prove tricky for small businesses with limited office space. In this situation, it can be wise to rent some cheap self storage for your archive boxes, to keep your office space free for your day to day operations.
- Didn’t have enough capital
Whilst many businesses are able to raise the cash to start the business, for example to buy machinery, equipment and stock, they often forget about the capital they need for day to day expenses, for example to pay for products whilst you are waiting for your customers to pay you. This is known as ‘working capital’, and should be planned into the businesses financials for a good six months after launching.
- Failed to prioritise marketing
Businesses who fail to market themselves, or do not have the skills and knowledge to do this effectively, might as well never have started at all. With social media opening doors to new marketplaces all over the world, self marketing has never been more affordable. Sometimes it also pays to get the professionals in, particularly if you are planning a promotional event or a big push for Christmas.
- Didn’t notice things had moved on
Times move quickly in the modern world, and as a business it is important to move with the times and ensure you are always giving the customer what they want. The danger of getting too buried into your business to notice that things have changed is that suddenly your products will not be necessary and you’ll have nothing else to offer.