Did you know that between 50 and 70% of small businesses fail in the first 18 months of activity? Although this percentage varies according to the country, the branch of activity, the period, and the polling agency, the reality is not very far from that margin.
The purpose of statistics is not to frighten. According to a speaker at Harvard Business School in the United States, the lack of an adequate and realistic business plan is one of the leading causes of these failures. Therefore, knowing the common mistakes that new entrepreneurs incur is a good measure. This way, you can avoid misunderstandings of those who have tried before and minimize the chances of failing in your future decisions.
Eight Common Mistakes When Starting a Business
- Lack of capital for the initial investment, including working capital
- Unawareness of the market in which it will act
- Ignorance of the legal and tax responsibilities inherent in the business
- Lack of or limited technical knowledge
- Inaccurate analysis of the place of installation and commercialization
- Little or no marketing planning
- Financial unrest
- A mix of personal accounts with those of the company
How to Deal with Common Mistakes
Knowing common mistakes is essential, but you will not advance if you do not deal with them. According to Feres, the entrepreneur must study the market demands and plan adequately before starting a business.
“This initial planning is called a business plan, and it will analyze the market (customers, suppliers, and competitors), the necessary structure (physical and personnel), and, along with that information, the economic and financial viability of the future business. That is, will it generate income? At what time? How much? “Says the consultant.
After preparing a business plan, entrepreneurs must stick to their goals and invest correctly and prudently, avoiding acting impulsively and “spending more than it should.” In this stage of financial organization, it is also essential to evaluate if you will manage the business only or achieve partners and investors.
How do We Avoid All These Mistakes?
After learning all the mistakes and how to deal with them, it’s time to learn a procedure to avoid them. Here are some valuable tips you should avoid, as they can drain your efforts. Let’s have a look at what those are!
Start Everything with a Perfect Plan
Write a proper business plan if you are going to start your own business. This idea will help you organize all your new business proceedings well and keep everything under control. Try to avoid all mistakes, as mentioned above.
With a well-developed business plan, you will stay consistent in activities, including signing different contracts and primary goals. Remember, it must be detailed or overwhelming. Try to keep it simple and to the point. It will help you to lay out a strong business foundation to streamline your business.
Ask yourself a few questions, such as long- and short-term business goals, the level of your business headed, issues you are striving to solve, and staying on track. Portray the status of your sincerity and the seriousness level related to these future endeavors.
Understand the Market Well
While launching your new start-up and before jumping into any industry, you must have a perfect idea of the market around you. Create all your products and keep your services in the immediate area that will lie in your purchase interest. You will need to take the time to know your market standards, and you can do this by conducting proper market research.
Learn everything about the level of spending with an understanding of the current economic situation. This trick will let your customers buy what they can afford. Consider the impact of market ruling from finances to the latest trends.
Conclusion
All of these things must always be under your consideration. You will need to learn about your client base with time. Don’t scramble; you can make profound changes to attract different people to your business.
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