Small businesses are the heart and soul of the entire US commerce ecosystem today. But sadly, 96% businesses fail in fewer than 10 years. Mistakes range from lack of a proper business plan, inadequate conception about target base, lack of sufficient funding and so on. Are you aspiring to launch your startup sometime soon? Well, the article below offers a glimpse of the typical mistakes observed in small businesses to ensure a flawless and smart venture on your part.
No idea of proper location
At times, even brightest of business ideas can’t save you if you are wrong about your business location. If your chosen city is not really welcoming to new entrepreneurs or your industry, you can’t really do much with your venture. Make sure to choose a location that favors SMEs, your particular trade and also offers potential opportunities for entrepreneurs. According to an article on the analysis of the best of small businesses in the US, NYC is the most favorable city for small businesses. The city patronizes entrepreneurial spirit big time and has announced to award around $16 billion to women & minority owned businesses. The other favorable cities for small businesses in the US are San Francisco, Chicago, LA & Austin.
Lack of business plan
Some startups hold this wrong notion to tackle problems as they surface. But such policies won’t work with big-scale challenges like cash crunch or unavailability of proper manpower. Thus, a proper business plan is fundamental when you plan to start your startup. It will not only render the map of progress but also reveal potential problems. A well thought business plan enables you to stay prepared with possible solutions and alternatives in case an emergency strikes.
Inadequate notion of customer base
This is one of the most common mistakes seen in small businesses.
Startups launched in a haste do not usually hold a clear idea of the nature and characteristics of their customer base. If you don’t have a clear idea of the problems, needs, expectations and solutions of your audience, it’s not possible to make your mark. Thus, a thorough research on target audience is imperative before you launch your small business. It will help you to discover the exact requirements of the potential leads so that you can address those issues accordingly.
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Startups are often lean on capital. But if you are not proactive to improve your situation, there is no point in starting a business. There are certain necessary expense areas which every startup has to meet to run efficiently. For example, if you think you can reduce employee expenses by manning most of the jobs yourself, you are soon to burn out and so is your business. While overspending is a strict NO, you have to be careful about “sufficient” funding. Invest in attractive sales pitches to pull in investors and VCs. Then, of course there are crowdfunding platforms today that leverage on mass support to boost new businesses.
Some startups are so focused on production that they almost forget about marketing. You cannot ever expect to make your mark if you don’t make efforts to spread your word. One of the major marketing mistakes to avoid here is inadequate and restricted marketing. You have to spread your word in every possible avenue that reaches to your target base. Later you can analyze to find out the most potential marketing channels for you.
Not being mindful about motivating employees
Employees are the main horsepower of any business. If they are not motivated enough you cannot expect high productivity- despite having a skilled team. A lot of small businesses fail given the lack of commitment from employees. And, it’s the management who is at fault here. You can’t expect dedication from your employees from day 1 just like that. Rather the business executives should be proactive to motivate their staff. It can be achieved by the establishment of an easy communication channel, creation of a favorable workplace, maintenance of impartial treatment for all, acknowledgement of efficiency and foundation of a bond of trust.
Not being careful about patents
It’s really frustrating to see someone stealing your own unique idea and selling it in his or her name. The worst part is that you are unable to do anything about it since you don’t have a concrete proof. You might sue the fraud company but only to end up in court battles of lifetime. Meanwhile your business suffers and sinks. It’s mostly because you were not mindful enough to get a patent for your exclusive development. A lot of small businesses are lost in oblivion just because they failed to protect their unique edge. So, if you have come up with an innovative technology or idea, make sure to secure a legal patent for it.
Make sure these mistakes don’t get to affect your dream startup.