Starting a business is one of the most rewarding and worthwhile endeavours one can undertake. However, it has to be done right. According to Bloomberg, 80% of entrepreneurs who start a business fail within the first 18 months. With the odds stacked against business owners succeeding within the first two years of operation, one cannot afford to make mistakes.
If you are looking to start a business and make it flourish to the point it grows and becomes profitable, you need to avoid making these six mistakes:
1. Being Underfunded.
When you open a business, chances are you’re not going to start making profits immediately. It can take months before you begin to break even and even longer to realise any gains. That is why it is ill-advised not to have enough capital to keep the business afloat as you work towards growth.
Sources of funds when starting a business can include alternative lenders, investors, venture capitalists and even family and friends.
2. Not Doing What You Are Good At.
You know the saying, “Do what you love, and you will never work another day in your life”? Well, what they didn’t tell you is that to succeed at what you love, you also need to be good at it. Even though you like to cook, starting a catering business where you do the cooking would be a recipe for disaster if your skills aren’t up to mark.
Bottom line: When starting a business, always do what you are good at; not merely what you love. Moreover, if you happen to be good at what you like, you are lucky since the motivation and dedication to succeed comes easy.
3. Not Researching Your Target Market.
You might have a brilliant business idea and the funds to make it a reality. However, eagerness can blind you, making you not realise that the market you are trying to enter is oversaturated with similar products. This increases your chance of failure before you even hit the ground running. To avoid this costly mistake, research the market you’re trying to penetrate and find the gap in the market before investing.
4. Only Launching When Everything is Perfect.
Sometimes, we can be such perfectionists that we won’t move forward with our business idea until everything is perfect. This is an impractical way of doing business, and you should launch when your idea reaches the stage of being good enough. Waiting for all the stars to align means your business idea is just sitting and not bring you any revenue.
5. Not Being Incorporated.
Starting a business gives you the privilege of choosing many business structures, which include sole trader, partnership and limited company. While each structure has its advantages, becoming incorporated (forming a limited company), brings benefits that can’t be beaten.
For one it means you have limited liability, which protects your assets from claims made against the business. Also, it means some limited liability financing options will become available to you should you need fast working capital.
Everyone who starts a business wants it to be a success. The process of starting a business is one that needs to be approached with a lot of care. With a high number of business owners failing, taking time to research what mistakes to avoid can increase your