The objective of our talk was not to discourage them but to tell us the faults you should not make if you are starting a business or thinking about doing it.
These are the ways that are considered infallible to kill your business:
Start a Business Without Even a Minimal Financial Cushion
Whatever your product’s benefits, it will still take time for people to learn about it. At the initial stage, investments often exceed income. Therefore, you need a minimum amount of money. Even if you do not have hired employees, you will need money to settle with suppliers and pay for advertising.
More than 60% of domestic startups use the founder’s capital as the primary source of financing, and a third of entrepreneurs work for hire at the same time as the development of the startup.
Working elsewhere to fund a startup is a great way to insure yourself: the guaranteed income from your main job will not depend on the profit of a still-developing company. You have to forget about such a thing as “free time.” Now, it will only go to sleep.
To avoid being torn between your business development and work for hire, first collect a certain amount of money you can hold out until the company you founded begins to generate a stable income.
The planned list of expenses should include payment for the official registration of the business (registration of an individual entrepreneur, acquisition of a license), rent of the selected premises, and purchases of products, materials, and equipment.
Remember your expenses. In addition to advertising, you will also require money to create your site. It would be nice to save up an amount equal to a six-month living wage before going into free-swimming from a hired job.
Have No Idea About Your Target Audience
If an entrepreneur does not have a clear answer to the question: “Who will buy your service/product?” and he answers something like this: “Everyone around,” then know that such a business will not last long. With such considerations, it is difficult to trade even common goods, let alone narrowly segmented products.
For a product to be in demand, it is necessary to determine what your potential customers are interested in and then offer a solution that meets their needs.
For example, the installation of vending machines in a shopping mall. Let’s face it: the idea is somewhat dubious. Of course, plenty of people are there, but most will prefer to eat slowly and comfortably in the food court. It is another matter to install such equipment in an office center where people are used to snacking on the run or at the workplace – here, such an option can be very profitable.
To study the target audience, use the 5W methodology. This method requires answering five questions:
- What (What)? What group of goods or services do you offer?
- Who (Who)? What category of people can become your potential buyers? What is their age, income level, and where do they live?
- Why (Why)? Why should your offer be of interest to customers? What customer needs can your product group satisfy?
- When (When)? What situations might motivate a customer to buy your service or product?
- Where (Where)? How can the buyer get acquainted with your products and purchase them?
- Wrong prioritization
One of the surest ways to kill your own company at the start is to solve secondary issues. Many, for example, do this: they order the most incredible site with an incredibly complex design. After that, they begin to finalize and design it, but they never start it up.
The Eisenhower Matrix will Help You Prioritize Correctly
Aspiring entrepreneurs often suffer from procrastination and postpone the start of work instead of solving essential and secondary tasks. New studies seem too incomprehensible, voluminous, and scary to them.
Let’s say you started with the right things. Further, it is essential to pump sales and marketing constantly. After all, sales are the blood of business.
Starting with the design of the picture and not looking for potential customers is, to put it mildly, wrong. Learn and understand in detail how and what you should be selling because, at the initial stage, all sales rely on the owner himself.
It would help if you devoted most of the time not to solving routine issues or to what you like best but to finding buyers.
No Plan
If you want to kill your business immediately, do not plan anything but act as you see fit. All because having drawn up a plan, it must be carefully implemented, and only then can the result please. Of course, planning takes a lot of time, but you need to imagine the path and follow it to achieve the goal.
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