Starting a business is an exciting and scary process. In order to be successful, entrepreneurs need to plan ahead and be prepared for challenges along the way.
By understanding these typical mishaps you can reduce the risk of falling short and keep your business growing at a steady rate.
This is a guest post by Cameron Johnson.
Not Calculating When You’ll Break Even
Starting a business is expensive. Within the first few months or even years you might not receive a paycheck because all your income will be invested back into your business to cover expenses. When starting your own business, you need to create a clear business plan that details when you’ll start breaking even. This is information you need to qualify for a small business loan and information you need to provide to your investors.
Poor Customer Service
Often, people start their own business because they don’t want to deal with people anymore. Unfortunately, no matter what kind of business you’re involved in, you’ll almost always need to deal with a customer. Whether your customers are people who are buying your products, people who are using your services or other businesses, you need to establish relationships with people. Customers are more than willing to provide feedback and comment on their experiences. Though it’s often difficult to accept feedback, an unwillingness to accept customer feedback is an easy way to ensure your business will not stay afloat. The age-old adage “The customer is always right” should be at the helm of every business decision.
Not Marketing Your Product
No matter how amazing your product, service or website, you will still need to get the word out to people in order for them to buy. In your business plan, you can outline a marketing strategy that will help get the word out about your product and start raking in customers. There was once a time when you could set up a brick and mortar shop in the middle of town, and people would flock to see what the new business was all about. Now, there are so many people setting up—all over the world. You’re not just competing with other businesses for foot traffic, you’re competing against online powerhouses, like Amazon.com. Getting the word out through paper marketing materials, online advertising, TV advertising, billboards and other signage will help draw customers to your business.
Expanding Too Quickly
One of the easiest ways for a business to tank is expanding too quickly or spending money on marketing or supplies that is not in your budget. While marketing your business is an important step, you still need to start small and work your way up. Start with a few flyers or a web presence and begin working your way up to billboards and TV commercials. Many businesses often expand their businesses physically too soon. You may have gotten a lot of foot traffic in your small Downtown store; it doesn’t mean people are going to immediately flock to a larger location you’ve opened on the edge of town.
Not Doing Your Research
Another aspect of your business plan, researching the market before you open a business will help keep your business going. Research should be completed on your business’s location, other competitors in the area, the demographic you’re reaching out to and how much revenue you expect to see within the first few quarters.
Not Establishing a Unique Sales Perspective
Why should a customer buy books from your online bookstore and not from Amazon or Barnes and Noble? Do you specialize in hard-to-find books? Do you offer spectacular customer service? Do you make customers feel special and well cared for every time they visit your site or store? Establishing why a customer should buy from you and not anyone else is an important part of starting any business.
Poor Leadership and Management
The people you choose to run your business are just as important as your customers. You might choose to run everything or you might hire someone else to run the show. If you’re good with people, you might be the best choice. Just be aware: some people are better silent partners than they are in leadership roles. Make sure you and your management team understands how to manage others.
About the author:
Cameron Johnson is a business consultant and entrepreneur. Over the course of his career he has conducted case studies on both social media optimization and non-profit marketing. Cameron has also had the opportunity to speak at international business conferences and was recently recognized as one of the world’s top 100 advertising experts to follow on social media.