Opening your business is indeed an admirable achievement. However, your struggles don’t end there. In fact, it only gets harder from here. Endless challenges will come around that can severely cripple you and your business if you are not prepared to handle such situations. There are so many things that can go wrong for new small businesses and you, as the owner need to know how to face every possibility. To help you on your journey towards business success, check out the five things that can doom your small business and note down everything you can to avoid them.
A Bad Business Model
If you pursue a business idea without a reliable strategy and a set of business plans, you are likely to taste failure, regardless of how good your idea initially was. Omitting to establish a business plan before opening your business can have severely crippling consequences. You may end up wasting your time, effort, and money if you are not mindful of strategy early on.
In that respect, you must build a good business model beforehand. Study the market and learn from other businesses that are already operating in the industry you wish to penetrate. That way, you can develop a business plan that includes valuable foresight based on other businesses. It is smart to learn from your competition before letting yourself be known. Study their success as well as their failures and mistakes that you may implement what’s right and avoid the things that led them astray.
Putting too Much on Your Plate
You’ve opened up shop; you’re excited, you are desperate to see the money roll in. All if which are normal for you to feel when you’ve first established your business. However, keep in mind that many businesses failed because they pursued too fast of a growth and ended up tripping over their own shoes.
Be aware of what you can do smoothly and what you are simply not yet ready to do. For instance, if you opened up a one-man graphic design company and are aware that you can only cater to so many clients by yourself, do not over advertise yourself. One mistake that you can do is make your service known in a vast area and even offer a special promotion. You could end up with too many clients to please and end up not being able to deliver what you promised.
The only thing you were able to accomplish in that irresponsible action is attract customers, which is good, but since you failed to deliver, you damaged your creditability early on in the game. The consequences of such mistakes can haunt your business in the long run.
Along with a business model comes a growth and expansion plan which you must follow. Conduct appropriate research on your market and its demands then proceed with operating within your means and what you are able to supply. Never put yourself in a situation where you will be forced to take on more than you and your company are ready to handle.
Alienating your Customers
Apart from your employees and your pocket, costomers are another thing you must please. Keep a close connection with them in order to understand what they like and dislike about your products and services. Alienating them and treating them as bodies who provide you with profit is a dire mistake to make. Not having a connection and understanding of your clientele will surely cause you to miss opportunities to improve and red flags that indicate the things you must change.
When you enter the market for your business, surely you did so knowing that the demand is properly intact. That is what a smart business person would do. However, an even smarter business person will also be aware of the fact that with demand, comes competition. Do not ever think that you are the only entrepreneur who noticed the existing demand for a product or service in your area.
With that in mind, you must keep up with the competition and find a way to place yourself above them. Regardless of the demand and the supply you have to satiate said demand, if there is another business offering it better than you, the customers will head their direction instead of yours.
Conduct research on your competition, check out what promotions and perks they are offering. Come up with something unique, a special promotion or service package that had never been offered by the competition. That way, you will be able to be the blue M%M in a sea of yellow ones.
Entrepreneurs often start businesses in the hopes of making a suitable profit out of it. What some fail to realize is that apart from having the means to make money materialize, knowing how to keep the money there is important too. You must make an effort to learn how to manage cash flow and other financial concerns. It isn’t enough to be satisfied with a full cash register because, at any moment, the said register can turn bare.
One thing you can do is know where every penny in your business goes. Keep track of all the money you have made as well as the money you have spent. Be sure to have a contingency funding plan ready, just in case a financial disaster strikes. Many businesses often fail to adopt such a plan, so when a financial crisis rears its ugly head, they end up throwing in the towel.
You have to know where your business stands at all times. It is best to utilize professional business accounting software that will help you keep track of all your transactions. Knowing your profits and losses is indeed important for you to stay afloat amidst challenging waters.
There are only a few things more heartbreaking than watching your dream business fail, especially when you were not able to do everything you can to keep it alive. There are many things lurking about that can doom your business. If your business is your baby, you must do everything in your power to equip yourself with the means to keep it running.