By Leila Dorari
According to foxbusiness.com about 80% of new businesses fail within the first year of their existence. What is it that kept the 20% running? For some reason, those 20% were wise enough not to make certain mistakes. By analyzing where others went wrong, you can learn to avoid repeating their mistakes and act accordingly in certain situations. Here are five all-too-common mistakes that start-up companies make:
– Not researching the market
This is a no-brainer. Without doing market research, there is no point in setting up a business. This will help you determine your niche as you will be able to see what it is that you can do and the market needs. Also, you will be able to learn who your competitors are. The requirements and the state of the market will dictate the pricing. You cannot base a price purely on your expenses. You need to know what value similar products or services have in the current market, determine a competitive price and find a way to lower the expenses so as to fit that number and allow you to make revenue. A lot of fresh entrepreneurs fail here as they are not willing to pay professionals to do the research, thinking they can do it themselves and thus fail to note certain aspects.
– Failing to ask customers what they want
It is obvious you cannot please everyone, but by asking the customers about what they want or what they would change about your product if they could, you may get a useful insight and you might be able to feel the pulse of the market. If your surveys tell you that people would prefer to get a cookie in a cardboard box rather than a plastic wrapping, do it, regardless of how insignificant the change is seeing that the actual cookie is still the same. You may think that most people are just being whimsical but at the end of the day, it’s their opinion that matters and their money you want to get.
– Not moving forward
Do not cling to one successful thing you have. The key is in innovation, so keep the quality and attributes of your initial idea but keep on upgrading it. Have you noticed the mass hysteria when Apple is about to launch a new iPhone? You should learn from the best, never get stale and get everyone excited about your products. Furthermore, the greatest friend and foe in every industry is technology. If you keep up with it, you have a valuable ally. However, the rate at which it is advancing makes it difficult to catch up. Remember that you can keep the traditional values but still be in touch with the modern way of living, no need to renounce one for the other.
– Not improving financial acumen
Financial acumen is a good skill to have. This applies to both financial and non-financial staff. I am sure you know that the amount of money in your bank account and the value of your assets are what determines whether you are successful or not. Make sure that at least every executive within your business understands what certain moves mean and how they affect the overall finances. Of course, you will have your accounts department in charge of the money flow, but you also need your production and sales manager to know or be able to calculate the consequences of their actions. According to law firms offering professional insolvency solutions, the lack of financial acumen is exactly the reason why so many companies go bankrupt.
– Failing to delegate
A lot of people have trust issues, at least when it comes to important things. Sometimes it feels easier to do something yourself than involve a person of whose performance you cannot be certain. As your business groves, you will find yourself squashed under the workload unless you learn how to delegate. I am sure that by now you value certain people more than others. Reward those people by showing them your trust and putting them in charge of certain parts of the business. If it is going to help you retain your peace of mind, hold staff meetings regularly and have them report to you daily until you feel confident that they can do the job. Businesses managed by one individual only are bound to fail as it is impossible for one person to be on top of everything at all times.
Have you heard of the Museum of Failure? There are actually many museums of the kind and they are all filled with bad ideas and broken dreams. Make sure you do not become an artifact in one of those. Honor the market and your customers, and stay on top of your finances and internal affairs.
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Leila Dorari is a Sydney-based entrepreneur and freelance writer, passionate about helping small business skyrocket their performances using proper marketing slogans and implementing various proven management tactics.
