Mistakes every successful small business owner never made
In the USA 99% of companies are classified as small business enterprises, while they provide employment to 80% of the population. It is obviously not that easy to start your own business from scratch. Unfortunately, half of the enterprises collapse in the first two years.
First of all, it is very important to understand your own reason of business foundation clearly and realize what does success mean to you? Do you plan to be a future millionaire in a year or open a non-profit charitable dining room?
There is a chance to get carried away with a biz idea and start a business without checking its viability. If you really see a perspective and a unique business model, the ways of its implementation, utility for others and real revenue generation, its high time to consider every single detail carefully in advance.
Be afraid, but go ahead!
The list of most typical mistakes that do not let you stay in business
On the road to success, it is crucial to take into account hasty steps that aspiring small business owners make most frequently:
Evading to Plan
The value of a business plan lies in the process of its drafting. In one way or another, you have to figure out every detail of your business providently. Those who pay attention to a form, not to content, do not understand the point of a business plan. Investors and bankers advise strongly not to receive the assistance of consultants to elaborate a business plan. Not more than 5% of entrepreneurs draw up a business plan to all rules.
The remaining 95% has a mind of its own and as a result, the amount of bankrupt companies is deeply unimpressive. Some amateur entrepreneurs have their business plan in their head or written on the "old envelope." If your planned enterprise is risky, a business plan will show the reason and help to reduce the losses in case of bankrupt.
The key idea is that a business plan should be developed only by an entrepreneur who may adopt some approaches from professional consultants. Thus, a business plan is like an instruction to business starting and doing, not just for an official record.
Missing due date for your business tax return is the core mistake as fines and penalties begin on this date. Incorrect social security number, a misspelled name, incorrectly filled status, math errors, missing income, return signing failure are just the most common simple tax errors. The best way to avoid this mess is to use one of the tax return preparation software services, but this won’t guarantee you won’t make a mistake. To secure your business, you will need a business tax preparation or individual tax specialist.
Lack of Market Analysis
Precise market data will avert highly optimistic predictions. There is a large number of resources available that can provide you a picture of general trends and main consumer's habits. If you do not research a market thoroughly, you risk selling your product to the wrong people who misunderstand your marketplace. To avoid this, use such resource as free government data or any other personal network, analyze customers’ profiles, reveal consumer trends and share ideas with entrepreneurs in the same segment. It is of the utmost importance to consider your audience or customer needs.
Concealing a Business Idea
If you keep all business ideas in mind and do not share with people you trust or other successful colleagues, you will not receive an adequate feedback or a perspective. Note any potential idea you hear from brainstorming and use it developing your business. Also, take into account the opinion of possible customers regarding a product or a service and allow them to test it. It will demonstrate whether your goods or services meet the expectations of the target audience.
Upselling and Cross-selling Missing
If you do not offer extra products or related services to your customers, you are losing profits every day. Upselling is the encouragement of customers to choose a comparable more expensive product or service, while cross-selling attracts people to purchase related or complementary items. For example, toothpaste can be sold with a toothbrush. Cross-selling is widespread in every type of commerce, including banks and insurance agencies. Quite common cross-selling refer consumers to items they will buy either way.
Cutting Age Technologies Weakness
Most modern entrepreneurs realize that technical architecture, software, data, and support are the core foundation of any successful business. Ironically, new technology utilization can be a major source of expenses for your enterprise. At the same time, enterprises are not limited by location, size or access to resources today that allow getting through to hundreds or millions of customers on various networks. Well, no wonder that companies which introduce digital transformation programs improve customer engagement and utilize resources more efficiently. Be ready sometimes to find an IT professional if the technology fails to work, as it is attacked by competitors or in case its parent company folds.
Very often entrepreneurs try to do every task themselves. This is one of the most common misconceptions. Sometimes it is essential to find a professional in a certain area and delegate a task that will contribute to business income. Delegation is the assignment of any responsibility or authority to another person to carry out specific activities.
Legal safety, cyber-security, and work safety are not the priorities that are analyzed to last details. Looks like a good way to get trapped. A business idea is not a secret, but a client base is a confidential information that a successful businessman should treasure.
Prosperity on Debt
Really often banks are increasingly unlikely to approve small business loan applications. Though there is a plenty of some other options such as non-bank lenders who are ready to approve small business plans with a small budget gladly, keep your eyes open. A small business loan is reasonable if you obtain an amazing credit rating with a collateral and also if you are ready to pay a large lump of costs yourself. Be ready to strict requirements, repayment burden and irregular payment amounts. If you think about investors, please pay attention that they need solid proof of the business's future success and will expect a large return from their investment, even a portion of the business, making restrictions on the running of your company.
Patenting and Trademark Issues
Ensuring legal rights to a certain product or profitable business idea secures that no person can claim to it. To guarantee your business idea remains only in your ownership, patenting and trademarks will secure your legal rights without a question.
Starting up a new enterprise without sufficient operating capital will have rather dubious results. It is one of 10 most common reasons that small business fail. It is crucial to figure out an average weekly spending for overhead, utility bills, labor, rent, mortgage payments, payroll expenses, raw materials, interest and tax payments etc. Armed with this information, you will be able to forecast whether you'll have enough extra capital to expand the business, or to stash some money into savings. If you are at the begging of business running, it is also critical to assume your future revenue taking into account your geographical area, work hours and researching the experience of other local enterprises.
Business owners are often overstretched with their decision-making on a day-to-day basis. In order to move towards prosperity, it is better to avoid costly mistakes experienced by others before you. If you take into account all possible missteps, someday you will find yourself in a better position to achieve desired long-term success.