The first year of any new business is generally a steep learning curve, no matter how knowledgeable you are of your target market. It is a fact of life that mistakes will happen. But if you adhere to some of the biggest mistakes made by start-up businesses below you will be best placed to negotiate the pitfalls ahead.
Don’t sell yourself too cheap
As a newcomer to the industry the temptation is to price goods and services low to undercut competitors and attract clients and customers. Unfortunately rock bottom prices rarely equate to sky-high sales figures and as a result many new businesses simply don’t make enough profit on their sales. Instead, why not research your market and set your prices competitively to ensure you have a margin that yields a return.
Lack of brand exposure
All too many small businesses fail based upon the fact their product alone is not enough to make money. Whilst it can be very daunting for start-up owners to invest substantial time and money into branding, creating a strong brand is essential to compete with long-standing industry players and develop a loyal consumer base. Entrepreneurs should not be afraid to get their hands dirty promoting their brand via all forms of social media and traditional media to spread the word.
A lack of authority
As a new business owner it is important to set down the ground rules and expectations to the rest of your staff from the outset. Unless you make that transition from being a friend to a boss, your business will ultimately fail. Defined procedures and policies for job performance, recruitment, holidays and more create an acceptable level of authority as management.
Failure to acknowledge target market
A surprising number of business start-ups create a product or service with the assumption that “˜someone’ will want to buy it. However, this immediately pushes businesses into dangerous territory as they have no understanding of their target market and will therefore struggle to market their product. Instead seek to solve a problem in a market or sector you understand and can connect with.
Ultimately, a business start-up is like anything else – it requires time and a lot of effort and good fortune. Nevertheless the pitfalls above are just a handful of the hurdles to overcome to establish a new business for years to come. Have you got first-hand experience of starting a business from scratch? What were the most important factors in establishing your business in your sector?
About the Author
Lewis Mitchel is a journalism graduate from De Montfort University with a background in regional press, digital media and specialises in providing business guidance to SME’s. Lewis Mitchell is a contributing writer for Workspace Group and anyspacedirect.co.uk.