date: 2021-06-14 11:43:45
Beginning a Business is always difficult. There are various things that you need to think about and do at the beginning. This could eventually lead to poor decision making in some areas which can set you back.
Unfortunately, there is no secret sauce that could make your business become successful, success depends on various things. However, there are some common mistakes that mainly new business owners always make which can negatively affect your business.
Below are some of the most common mistakes:
Not planning before you begin
There are various steps that nee to be performed prior to starting a business. This includes, a thorough financial feasibility study and a market research. Without these plans, you could be operating in the dark. For example, without performing a financial feasibility study could mean that your project could require more cash in the future or generate less profit than you anticipated.
Setting prices lower than the market average to gain market share
At first, it could be tempting to believe that a lower price can attract a large customer base, however, various experts have stated otherwise, and believe that actually starting with an atleast higher than average market price is much better. This can be of course analysed afterwards, and you can start experimenting with your prices until you understand what is your best price to volume mix that would achieve the maximum gross profit for your company.
Not understanding who your buyer persona is
Your buyer persona simply means your ideal customer. This usually is not understood at first, unless you are targeting a specific sector, in which case this point does not apply.
Understanding, your buyer persona assists you in performing a successful marketing campaign and in turn drastically reduce your CAC (customer acquisition cost).
Overspending
This usually applies to tech startups who usually raise funds via investors. Startups are known to always overspend on various things which includes, hiring the best marketing firm, overpaying above average market salaries, purchasing the best equipment / office furniture or renting an fancy office at the early stage. Although, it is important to always perform effective marketing, getting an office or hiring the best employees as you can, however, if you are willing to do the research, creating and sticking to your budget to avoid overspending is very important.
Not committing to your business
Based on research, one of the top reasons of the failure of business is that business owners eventually give up after starting a business that doesn’t pick after 5-6 months. It should be understood that start-ups and business ‘usually pick after a huge amount of effort and time are put into it. Business owners need to be willing to make sacrifices, put in the time necessary, and face challenges if they want their businesses to be successful.
Working and hiring with friends instead of experts
Various business owners tend to hire friends instead of the most appropriate individual for a specific job. Although, there are some exceptions in which this has worked, however, generally this always leads to problems, given that the nature of operating a business usually requires difficult decisions that might not please everyone. It is very important to always try to construct the right team.
Falling in love with the solution instead of the problem
One of the other most famous reasons of business failures is that business owners love their software or product. This is not a correct approach, as usually businesses are made in order to solve a certain problem, not force customers to use a certain product/service. In that sense, business owners need to be flexible enough to understand if you need to modify a part of your service / product, or maybe possibly even the whole business model, if that means making something customers want.
The above mistakes are usually more common with first time business owners, albeit, sometimes experienced business owners tend to make them as well. At the end, everyone makes mistakes, the important thing is understanding what it is, learn from it and try again.
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