As many of us know, over half of all businesses fail before their first birthday. I don’t tell you this to scare you off. Actually, it’s quite the opposite. I use this statistic to encourage you to work even harder at your dream. Only a small percentage of companies survive the early years, and it takes an enormous amount of perseverance.
It also means avoiding some of the biggest mistakes and pitfalls. As a new business owner, you can learn from the mistakes of the past here. While you may be relatively inexperienced, the same mistakes are killing businesses time and time again. Learn them, and you can avoid them.
Mistake #1: Not listening to your customers
No matter what industry you’re in, your customers are the heart of your business. Without them, your profits will dry up, and you’re left for dead. Unfortunately, you can never take their custom for granted. In fact, you must work hard to keep it. That’s why a regular communication is essential. Conduct regular focus groups, and maintain a dialogue over social media. What do you customers want from your company? Most importantly, what are you doing poorly? Trust me, your customers will be the first to tell you!
Mistake #2: Failing to understand the market
This mistake has caused the death of numerous companies, not least mobile giants Blackberry. They completely failed to comprehend the emerging smartphone market, and were swallowed whole. If it can happen to an established industry player, it can happen to your company. Keep one eye on the horizon, and understand the market around you.
Mistake #3: Getting your pricing wrong
A lot of small businesses struggle to price their products correctly. Startups have a tendency to price themselves too low in the market. This is a problem because it immediately makes them look inferior. It also makes it even harder to maintain a profit margin. Low prices can strangle a company’s finances, and give the appearance of poor quality. On the other hand, pricing your services too high, can isolate you from the market.
Mistake #4: Not setting up legal foundations
When you run a small business, any cracks in the foundations can lead to complete collapse. For example, if your company is sued, it could cripple your finances and reputation. Meanwhile, if your core product is copied or stolen, it could leave you without a unique selling point. Always make sure your foundations are watertight and secure. Start by registering your business at Your Company Formations. That gives you an officially registered businesses. Next, speak to a lawyer about protecting your intellectual property with patents and copyrights.
Mistake #5: Failing to watch your competitors
In business, it’s easy to keep your head down, and focus on your own work. However, you must always keep an eye on your competition. What are they doing that could exploit a new market? What products are they working on? Who are they marketing too? If they spot the gap before you, it could leave you blindsided. Don’t get left behind!
That’s all for now, folks! Stick around for more business advice on the blog.