Starting a brand new business can be an exciting time, but it can also be incredibly stressful. There are many pitfalls that new small-business owners need to be aware of in order to build a thriving company.
While there are a few key mistakes that many start-ups will make - many are also easy for small businesses to avoid, provided they invest the time to understand and address these issues. To assist this, here are six common mistakes new companies fall into.
1) Not putting together a plan
Planning is at the heart of every good business. Companies will need to draft separate plans for their business strategy, marketing and finances and make these as detailed as possible prior to opening their doors. This requires a healthy dose of research and also taking the time to understand the major trends that are affecting your business and industry.
Failing to undertake these steps means you are essentially flying blind and have no framework for building your company in the future.
2) Not investing in marketing
While a marketing plan is essential, it is also important that start-ups are also backing up this plan with the right level of resources. Starting a business from scratch means that very few people will be aware of your products - meaning marketing is essential.
Failing to invest in this area will make it harder to build a customer base and will stunt company growth.
3) Failing to find the right spending level
For a new business, finding the right spending level is essential. Spend too much and your business will find itself in the red very quickly. Spend too little, on the other hand, and you won't have the staff or the market presence to achieve future growth.
Instead, businesses need to try and find the right spending point - which balances investment in new growth against the resources you have on hand.
4) Keeping your prices low
It can be tempting to assume that the only way to compete with an established brand is to offer your services at a lower cost. While this might seem attractive, it may also make it harder to maintain strong cash flow.
Think about what else you can offer a customer beyond simply a lower price. If you are also providing a level of expertise that is unmatched in your field, for example, this can be used to justify a suitable price for your services.
5) Not integrating new technology
For a small business, the range of technology on offer has never been greater. Company owners can now choose from a whole range of technology that makes their lives easier and streamlines the process of managing a business.
While this is a great benefit to companies, it also means that hesitating around new technology can damage a start-up's chances to grow. Every successful business is already investing in new technology, which means start-ups have to focus right from the beginning on using innovative processes to improve their operations.
6) Not committing to the business
Running a start-up is no small feat and it will take 100 per cent of your effort to make it work. However, many new business owners will treat their venture as a side-project - something they work on when other things aren't getting in the way.
Failing to make a serious commitment to a new business will put the enterprise in jeopardy right from the beginning. No matter how great your business plan and how savvy you are with new technology, anything less than your full attention is going to become a barrier to future growth.
While these issues are among the most important for a small-business owner to address when they first start out, they don't have to a serious obstacle for your business. By taking the time to plan ahead and address these issues, you can be sure your company is off to a strong start.