The 10 most common mistakes on starting new business

Some say: BUSINESS IS A GAME. You will win or lose individual hands, but it’s what
happens in the long term that matters. To avoid the disappointments during the game “Business”, here are ‘The 10 Most Common Mistakes on starting new busines’

Mistake #1 Failure to spend enough time researching the business idea

Spend more time working on your business plan, which should include: research on your target market (demographics), your marketing plan, your financial projections, your business strategy, knowledge of a legal framework, industry analysis (incl. size, economics, trends, success factors, challenges), and sales, your mission, etc.

Mistake #2 Failure to determine whether the business actually adds value

Make sure your products or services provide value and benefit to your clients. it’s a waste of time to try selling to people who simply don’t need what you’re offering. Selling to the wrong people includes trying to sell to everyone.

Mistake #3 Failure to gain a complete and total understanding of the business

There are many great ideas that can be developed, but the key in business is to make sure the idea—the central theme or mission of your business venture—can attract customers and generate sales and profits. A great idea in and of itself is not enough to start a business. Take the time to gain experience, study the business, understand what makes the business work (how to serve the customers and generate profits) and what leads to losses. Understand all the aspects of your business, and of particular importance, know how to present them in an easy and simple manner.

Mistake #4 Spending too much money

Obviously some businesses require lots of cash to start, but in the age of the Internet business, you can very easily start a lucrative business for pocket change. Your business should put cash into your pocket, so before you “invest” money into it, be clear on how you’re going to pull that cash back out again.

Mistake #5 Failure by underestimating financial requirements

Do you know how much capital you need to start your business? Do you know the market, did you calculate your cost, did you project your sales, do you know the number of clients you need? Do you know how long it will take before you get your first benefits or before you will run out of money? Invest the time to work on all aspects, especially the major ones, of your business before you start.

Mistake #6 Hiring the wrong people
Numbers of new entrepreneurs ask their friends and family for advice when starting a new business. The problem is that they often ask people who have never started a business; so in reality, these people are not in a position to offer sound advice.
Get a mentor or two for avoiding this trap. Surround yourself with experts who possess skills and expertise that you lack. Team up with professionals who can complement your strengths and cover for your weaknesses. Even if you have a small budget to begin with, you can enlist the help of a virtual assistant or possibly volunteers or mentors.

You need to explore all the options available to you. These include:

▪ recruiting permanent staff on a full or part-time basis
▪ fixed-term contract employee
▪ temporary staff
▪ freelancers
▪ consultants
▪ contractors

Mistake #7 Lack of signed contracts and of adequate record-keeping

Transactions and operations must be properly documented. The purpose of a contract is to clearly define everyone’s roles and commitments. The contract documents each party’s obligation and to allocate and minimize each party’s risks during the performance of the agreement. Quality contracting results in no surprises for either party. The customer requirements and vendor commitments are fully aligned and both parties have one and same expectation of what contract compliance or fulfillment looks like.

Mistake #8 Lack of in-depth market research

Many new entrepreneurs start their business without determining their target, niche and demography first and as a result have failed to attract any clients. Devising a marketing plan will help you determine how to promote your products or services and create a system that will generate more clients for your business. Research and planning are vital to ensure that your business idea is viable and that your pricing is both competitive in your market place and provides an adequate return. Lack of proper market research is one of the key problems for new businesses. Accurate market data will help prevent over-optimistic forecasts. It is also important to consider what your audience or customer needs are and to use market research to test them, and to then factor feedback into any products or services you are designing.

Mistake #9 Failing to actively monitor the competition

Failing to monitor your rivals will stop you from seeing what competition or threats to your business exist in your market place. Failing to use information gathered about your competitors will weaken your position in the market. During the busy start-up phase it can be easy to forget to set aside enough time to monitor the competition. However, it’s essential that you are ready to respond to competitors in your market place and to new developments. Competition is not just another business that might take money away from you. It can be another product or service that’s being developed which you ought to be selling or looking to license before somebody else takes it up. You can get clues to the existence of competitors from: advertising, press reports, exhibitions and trade fairs, searching on the web for similar products or services, flyers and marketing literature.

Mistake #10 Failure by under-budgeting the marketing costs

Today the world is overcrowded with businesses and probably a number of those in your market perform essentially the same functions as you do. This means that you have to differentiate yourself from them by making your business stand out. Publicity is essential to your livelihood; otherwise you will not attract any customers.
Provide adequate publicity, business cards and marketing materials that project a professional image. Don’t try to save money on these; they are reflecting your business. A cheap business card or flyer will not make a professional impact.

© Jenny Gancheva 2017