For an entrepreneur, starting a new business can be a very exciting time. The ambition to hit the ground running can sometimes hurt your potential for success; by rushing forward, you can ultimately set your business back.
While there is no set plan to achieve success as a start-up, there are a few common pitfalls that many new businesses encounter. To help you avoid these I have listed a few below for you.
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If you fail to plan, you are planning to fail
Planning is crucial to start-up success. You may choose a detailed business planning approach including marketing and financial plans. Alternatively using a ‘Lean Startup’ model could be more desirable. Whichever route you take you've already taken a huge step into the planning of your new venture and improved your chances of success.
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Money, Money, Money
There is no way around it, starting a business is expensive. Many entrepreneurs underestimate how much capital is necessary to start a business. It is important to remember that you need to budget not just for the start-up costs of the business but also for the necessary living costs you will need for at least the first few months. Make sure to explore the many ways there are to raise capital, for example you could consider investors, partners or crowdfunding.
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Charge What You Are Worth
Undervaluing your products or services in the initial phases of starting your business is costly. It is important that you explore the market and identify the best price point for your products or services. Do not be afraid to price higher than your competitors, remember your unique selling points and ensure that these are reflected in the prices you charge.
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One Man Band
Many start-ups have a huge resource team of one person. Being your own accountant, marketing team or even delivery driver may seem like great ways to save money. However, it is important to remember where your value is really needed. For example, paying an accountant to look at your accounts will take them less time than it takes you, this means the hours you spent on your finances were not spent delivering your services or making your products therefore not increasing your revenue.
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Up, Up and Away
Scaling too quickly is something that causes many new ventures to fail. Business growth in the early days of a business may seem like a good thing, growing too slowly can cause issues financially, but growing too quickly can cripple a newly formed business. Businesses should always attempt to scale sustainably, before jumping in feet first and opening the likes of an Amazon Marketplace account. Think about your customer journey. Do you have the logistics right to deliver on time? Do you have the stock available to fill orders? If not this can lead to bad reviews, and if you are selling under your own brand on your own website then your reputation could be damaged. Why not look at 5 Steps to Achieve Sustainable Growth for Your Small Business for some extra tips on how to do this.
I do hope these examples are useful for you. There is a vast array of information out there for small business owners, do not be afraid to press pause in your business occasionally and learn from those that have been there before you.
I think Vidal Sassoon put it best when he said, “The only place where success comes before work is in the dictionary.” Starting a business is hard work, but we all know hard work pays off.
Emily Pegg
Business Engagement Manager