The statistics are sad.
1 in 3 businesses fail in the first three years. After all the investment in cash, emotion and effort, it is a really disheartening statistic. But hold on! That means 66% of businesses are alive and well. If you are just starting off in business then read about what can go wrong so you avoid!
1. Lack of planning. You have a great idea. You just know everyone will buy into the idea and you will make loads of money. But have you done your market research? Have you asked people if they need your service? Do enough of them say yes? (and not just family and kind friends). Investing money and time into something which only a few people want or need is not going to make you successful. My advice is to research and research before going ahead. Get the facts before investing your money. Make sure there is a gap in the market for your skills, or at least you can offer a new angle to something already in existence.
2. Trying to sell to everyone. There is no point trying to sell a product or service to everyone. It doesn’t work. Find a niche and make it your own. Think small initially but know that you can expand your business once established. Use your marketing budget well (we will come onto marketing soon) because it will be swallowed up quickly. For example, you may think that a dog-walking service is a good idea. But there are lots of people doing this. So find a particular niche within this market and target it relentlessly e.g. offer a short grooming service after a dog walk (for the dog!).
3. Marketing – not spending well and not having enough of a budget. Lots of companies want to sell you ad space but my advice is to research and research well. If you have a budget, ensure that you are not going to fritter it away on the first magazine that wants to sell you ad space. People who want your money are always very nice to you and make you feel great – but beware! Research each publication and website which wants your ad (unless it’s free!). Ask them for visitor numbers if it a website, how long do visitors stay on the pages, are any of them your target audience? Do put aside some income for marketing. You will need some to get your message out there.
4. Lack of contingency money. Things always crop up which you do not expect. If you have a start-up budget, then add another 10-15% on for contingency. Don’t let the unexpected be your downfall.
5. Don’t sit back and expect things to happen- they won’t. You need to work hard every day. Starting a business means putting your life on hold. But it is not all doom and gloom. You will find that you have talents that you didn’t know you had. I have!
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This post was written by Caroline Phillips