You have put your heart, soul, hard-earned money and boundless efforts into something that you had dreamt of launching for so many years. Majority of businesses that are launched every year tank within 5 years. You really have to be extremely meticulous at creating the right blueprint and road map to help you identify the metrics for success as well as to tell you about the dangers that might derail you from the track.
There could be so many reasons why startups fail but here are five very common mistakes that must be avoided. While a few can hold up the chance for success others can really prove to be fatal for your business.
Lack of a business plan
No matter whether you are setting up a shoe business or a restaurant you will require a business plan in place for having a systematic list of the controls that you will be carrying out. Don’t forget! At end of the day we are humans and not computers and a minor slip of mind might even lead to big blunders.
Of course once you have the business plan ready you can anytime go ahead and customize it later on the basis of varied situations and the business needs, even when your business is on its go. Anyway, no matter whether how wise business plan you have, you need to make the changes based on the changing time, technology & people but that’s not for always.
So, what does a basic business plan includes?
For your help, based on various studies on how businesses were launched and how successful they were, here is a checklist that you must consider while preparing a plan for your small business:
- Create an summary of your company’s profile and goals
- Write down the description of the company that should include what you do and what will make you serve.
- Conduct an in-depth market analysis and jot down the details.
- Get a marketing strategy ready
- Create a note that describes your business’s service or product line.
- Scribble down the financial projections
- If required request for funding
- Plan an organizational structure.
Need for the sufficient funds
You must figure out the amount of money needed for the business to be up and running before you launch it. At least you have the funds to run the business for a year and remember this doesn’t include your start up costs.
Believe it or not but many businesses have to pay some terrible costs for under-funding their company. At times, they need to close the company and all because of lack of the sufficient capital and they themselves have admitted to the fact that it was the lack of proper planning on funding the business that lead them to pull the plug.
Usually, there are two types of costs involved if you are preparing an estimate of the capital you require to run your business successfully
A few things such as Incorporation and licensing, , office furniture, equipment, signs, business cards, down payment on office space and initial inventory & stationary are there that come under your onetime expenses normally.
Monthly ongoing costs
Obviously, all you ongoing costs that you pay every month will come under such costs such as rent, payroll, taxes, insurance, supplies, advertising, website hosting and loan payments.
Not adopting the new technology
It’s a race that you have entered in by launching a business and that to have an edge over your competitors you should always utilize the cutting edge technology for the better reach and growth of your business. For instance if you talk about the marketing adopting digital marketing instead of the traditional marketing will help you grow your business in relatively very low customer acquisition cost as majority of your target audience is online.
Inappropriate setting up of the business
Good that you have amazing ideas with you as well as great resources at your disposal however at the same time you should be very serious about the paper work and legalities. You can’t take them for granted no matter how prepared you are with your awesome business plans. Ensure that nothing is missing and that you have all the proper paperwork & legal documentation ready before you do anything. Try getting registered with your state if required and get licenses.
Miscalculating the time required
Yes! You are your boss and that the master of your life at work too! But the bad news with the good news is now you need to devote even more time especially during the initial days of your launch. You cannot simply run a new business by giving your 40 hours a week to it. Starting a new business requires a lot of drive & commitment. You have to be more than willing to devote as much time required getting your business off to a solid start if you want to accomplish your business goals.
Don’t do them!