At the present increasing numbers of people are launching their own companies. Perhaps out of necessity, because they’ve been laid off, or by a desire to earn an income, startups are growing. But, research shows most startups will not last for five years. There are a variety of reasons behind the failure rate. Here are five reasons why you might fail that you can steer clear of:
Don’t think that everyone requires your product or service.
Small business owners are typically excited about their products or services. They aren’t able to comprehend why no one else isn’t impressed with their concept too. Take a look at the bigger image: recognize that the product you sell isn’t for everyone. Do not waste your time trying for ice sales to Eskimos. Instead, identify your exact customer base from the beginning and then only market to them. It is essential to concentrate on and only target those who would be interested in or require your solution for their problems. This means you don’t waste money on marketing and advertising to customers who are not interested in your product.
Don’t use shotgun marketing.
“Shotgun marketing” involves putting lots of things out there, hoping that something will appeal to your customers and that they’ll purchase. Similar concepts are described as ‘throwing things against the wall to see the results.’ It’s inefficient and wasteful and can turn away potential customers.
Develop a marketing plan and adhere to it. Know your client, as mentioned in the previous paragraph. Know the products they require and utilize. Only promote those products. Instead of using a shotgun approach, imagine this as a powerful rife equipped with an eyepiece.
Make changes to your marketing plan only when needed, not every idea that is new. If something doesn’t work, you can try a different strategy but stay far from your primary business. For a specific example, when you’re selling products for training dogs and different dog products, you shouldn’t offer gardening products for the same audience.
Don’t be “penny smart and penny foolish.”
It is essential to maintain an eye on your spending habits. The money will quickly disappear in any industry. Be sure to keep a close eye on your expenses, know the value of the money you invest, and prioritize your purchases accordingly. Don’t invest in the latest and most advanced’ gadget simply because it makes you appear fantastic. On the contrary, you should not be reluctant to invest any money in order to grow your business. It is essential to invest in your business to increase your profits. Find a compromise. Other people can assist by offering their views about what is worth spending money to purchase or not.
Don’t devalue people.
Your business is driven by people, Not contracts. Business is built on relationships. These connections lead to contracts and business. A strong relationship can lead to great referrals and even more business. However, sometimes things happen in business, and you’ll need to decide if you want to stick to the terms of your contract or be flexible to save your business relationship.
Sometimes, due to legitimate reasons, contracts can’t be honoured or completed. While a contract is beneficial and essential, however, the relationship you’ve built with your company partner is the most important. It is essential to assess each situation on an individual basis and decide what you should do in every scenario.
Don’t be late for the party of new technology.
Technology is constantly evolving and changing each day. Your customers stay abreast of the advancements in technology, and they’ll be aware if you aren’t. Be careful not to be the first one to adopt as this could result in you getting out of business in the event you pick one of the incorrect technologies. Keep an eye on the technology until it is mature, prices decrease, and initial bugs have been worked out before you decide to adopt it. Examples of the current technology include social media marketing, Web 2.0 applications, mobile devices and QR codes.
There are numerous minefields on the road to small-business growth, and this route is littered with the debris of promising start-ups. By being aware of and avoiding these startup mistakes, you’ll increase the likelihood of your company succeeding and expanding as you would expect it to.