Startup/small business mistakes to avoid: It is natural to be overconfident and assume money will start flowing in fast the moment you start a business. However, success is hinged on adopting working strategies and shunning those that do not.
As much as it is important to understand things to consider to make a business succeed, it is also prudent to take note of common mistakes to avoid. Here are documented pitfalls to steer clear of when you are starting a small business.
- Mistake 1: Inadequate Capital
Capital is a crucial requirement for actualization of a business idea. It can be from savings, bank loans or friends’ contributions. Irrespective of source, you need to be realistic on how much you can actually raise.
A common mistake budding entrepreneurs make is overestimate the actual amount they can raise. What follows are unfinished projects and accumulating debts as one seeks more capital to finish off what they started.
- Mistake 2: Rigidity
The business environment is characterized by ever changing trends. To stay afloat, an entrepreneur needs to be focused and highly adaptive. Sticking to age-old traditions is good when you are running a business based on sentiments.
On the other hand, reality requires an entrepreneur to be conversant with factors such as emerging technologies and dynamic consumer preferences.
- Mistake 3: Skipping Professionals
At first you may think you have it all figured out. You can draw your own contract, balance your books and pay taxes as required. However, there are fine details you may never know exist. And it is always those details in fine print that come back to haunt.
It is worth spending a fraction of your capital on professionals to help you ensure you have all bases covered than forego them only to end up spending a fortune to steady a sinking ship.
- Mistake 4: Working with Friends
Many a successful businesses started as ideas shared among friends. Nonetheless, there is a difference between a business found on friendship and a friendship found on business. Simply put, the latter is a recipe for disaster while the former is one for success.
A business needs the kind of serious treatment friends may not be ready to subject each other to. Feelings will often override objectivity and from that point things can only go south.
- Mistake 5: Bad Pricing
Low-pricing is the preferred entry strategy for most startups. However, setting the price for your new commodity too low may end up crippling the business in its infancy. Setting it too high may scare away potential clients.
You need to arrive on a pricing figure after soberly considering key factors including cost of production and prevailing market conditions.
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