There is a level of enthusiasm that comes with starting a business for the first time. A lot of first-time business owners get too excited, act blindly, running their businesses down and land themselves in debt as a result.
According to a report on Forbes, in 2018 the Small Business Administration (SBA) Office of Advocacy posits that roughly 80 per cent of small businesses survives the first year. That number sounds quite high because there is a common belief that most businesses fail in their very first year. It is safe to say that there are no guarantees, just principles to be followed and pitfalls to be avoided.
Capital may be a limiting factor, but if you repeat the same startup mistakes as older business founders, you are bound to fail worse than they did.
Starting a business requires that you do plenty of research, part of which includes how not to run a business. From research and expert opinions, here are 5 pitfalls to avoid when starting a business.
1. The pitfall of a wrong market notion
Business is business. That something interests you so much does not make it a viable business pursuit unless you know how you can turn your hobby to a business. Many businesses have become history just because of this wrong notion.
In business, you sell what the market wants, not what you feel like selling.
If you ignore the needs of the market, you set yourself up for failure. When you ignore the needs of the market, you quickly lose relevance. Discard the notion that the idea in your head is good enough until market research proves its viability.
2. The pitfall of not building an email list
Business is a game of numbers. The more channels you explore in driving sales, the more your chances of succeeding. Start early to build an email list for your business.
Also Read: The real reason why you should launch your startup faster (which is not talked about)
The start-ups who fail to pay attention to this end up at the bottom of the pyramid. Make email marketing a vital part of your business marketing plan.
A good email marketing service would enable you to create highly engaging email newsletters with an easy user interface (ideally drag & drop), mail automation, contact management and performance tracking of email marketing campaigns.
3. The pitfall of shabby negotiation skills
There is no law that says you must use up your start-up capital. Simply because you have enough to spend and go round for a start, does not mean you should do things without a proper negotiation.
Negotiation is a key part of business; it is an essential business skill.
You don’t negotiate because you don’t have enough, you negotiate because it is part of the business process. Shabby negotiation skills would drive faster down than calculated debt would.
Whether it is negotiating with employees, investors or suppliers, the key is to put your best foot forward and keep the emphasis on your business idea.
At this level, your target is to sell them your business plan or idea in the stead of a track record, which you don’t have because you are just starting out. Everything on the table is negotiable, master the skill and use it always.
4. The pitfall of not having a concrete business plan
Not having a business plan can be likened to flying blind or shooting without aiming. Every business must exist first on paper before it exists in reality. Your business should be so clearly represented on paper that it is near impossible for a willing investor to skip.
Creating a business plan takes time, thought and effort, and may seem like an impediment to getting on with opening or growing your new business, it is imperative in today’s competitive business climate for you to have all relative information available and evaluated before opening your doors.
With a thoughtfully prepared business plan, you will enter the business world prepared, ready to run your business and ready to compete.
Business plans are gradually becoming a cliché, but its importance remains undeniable. Along with depicting your business idea end-to-end on paper, painstakingly crafting your business plan helps you gain a better understanding of your business and increases your chances of success.
5. The pitfall of talent acquisition
Don’t be in a hurry to answer employer of labour. It is nothing more than a tag often too heavy on those who wear them. If you speak with successful business owners, you may be shocked to find out that they would do everything themselves if they could.
Before you employ anyone for the first time, make sure you really need to. The burden of paying salaries is real. Don’t hire anyone until it becomes necessary.
Also Read: 11 annoying business buzzwords you use without thinking and what to say instead
If you don’t put pen to paper and do your due diligence, failure is inevitable. Avoiding the pitfalls highlighted in this piece helps you keep your head in the game while making the most of your business.
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Image Credit: Ben Maguire
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