Every entrepreneur has an urge to succeed. You have so much energy and dreams for a successful business, but once you dip your toes in the real business, you find it to be overwhelming.
Have you ever asked yourself why most start-up SMEs don’t live to their 1st birthday?
There are those things that you as an entrepreneur forego or pay little to no attention to that will cost you your business.
1. Carrying Out Insufficient Research
You must invest in research before starting any business. Just because so and so is doing well in a particular line of business doesn’t guarantee that you will also perform well.
These are key areas you should research on:
- Location– when you’re dealing with tangible products, the choice of your business location will affect your growth rate big time. It also depends on the nature of your products. For example, starting a small grocery kiosk in a high-end neighborhood may not yield more returns. A high percentage in the high ends areas make their purchase in the big supermarkets and malls. However, such a business will perform well downtown and in areas highly populated by low and mid-income earners.
- Nature of your product– now that you have a suitable location, the next thing to figure out is the nature of your product. Are you just copying what every other trader is doing, or are you unique?
Being unique can be a hard nut to crack, but that shouldn’t stop you.
Try to bridge an existing gap in the market, invest in branding, and stand out from the crowd.
- Knowledge of the product is also vital, especially for a sole proprietor. For example, it would be unwise to start a shop for auto spare parts when you’re not knowledgeable of automobiles. The knowledge of the product should be your armor in convincing a customer to buy your product.
- Other things you should research are; customer preferences, the cost of running the business, and permits.
Before starting any business, you need to beware of how much capital you’re willing to invest. Depending on the type of business, some require large sums of money to start, while others require less or no capital at all.
Have a good business plan, and ensure that most of your capital doesn’t go into the fixed assets. The secret is to begin small and grow as you learn the market tricks.
Remember not to put all your eggs in one basket. Don’t invest all your capital at once.
3. Lack of a Business Plan and Good Structure
Don’t jump into business just because you’re broke, and don’t do it because you have some idle money lying somewhere.
Have a well-crafted business plan. You may need to involve a professional to help you in planning for your venture.
Know what percentage of your resources will go where. As for the structure, you must know your role in the business. If your business is a sole proprietorship, you will be the C.E.O, the Manager, the marketer, and the sole decision-maker. You must be able to know when to exercise each role.
4. Selling on Credit
Most business owners for start-ups make a big mistake of selling on credit in the hope of making large sales.
Some do it to please their friends in the hope that their friends will bring in new clients. Credit will paralyze your new business.
When you’re new to the business, refuse to sell on credit to anyone.
PS: you must also learn how to set your prices properly. Consider your customers’ needs, your needs, and your business needs.
Don’t set your price too low to attract customers but also don’t overprice your products.
Your goal is to make sales and get value for your money.
5. Inconsistency and Poor Time Management Skills
Most small and medium business owners usually have high spirits when starting up. It feels good to report to work. You want your brand and grow your business.
Customer reception is usually impeccable during the first months into the business, but slowly by slowly, you start to notice a decline in sales.
A decline in sales can be a result of your time management skills. Maybe along the way, you forgot yourself in the status of being a business owner.
Are you treating your clients with the same affection as before, or is money starting to change you?
A business requires lots of discipline, from how you relate with your customers and staff to how you plow back to for growth.
6. Failure to Advertise Your Business.
Advertisement is crucial for the growth of any business.
If you want growth in your business, make sure to invest in an advertisement plan as it helps you reach a large customer base while maintaining the current ones.
Advertising helps you to build your brand name. In some cases, it makes it easier for you to point out the areas that need adjustment and improvement.
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