It has never been this easy to put up your own business. This is the reason why various industries are saturated with new startups and solopreneurs. Are you one of them? Congratulations! Unfortunately, though, the likelihood of a new business surviving its first five years still hasn’t improved.
On the bright side, there are typical mistakes that you can avoid as a beginner entrepreneur in order to improve the survival rate of your business. In this article, we are going to share with you what these crucial mistakes are in the form of a checklist, along with some helpful questions that you can ask yourself to gauge how well you’re doing. Let’s get started!
Mistake #1: Misinterpreting the Risks
First of all, it’s important to understand that starting any business always requires a certain amount of risk. It just depends on careful calculation to determine which risks are worth taking. The question is, are you doing it wrong?
There are two ways in how amateur entrepreneurs can miscalculate the risks involved in a venture: they are either risking too much or too little. This will also dictate how much money they are putting out.
Am I Spending Too Much?
We’ve all heard of the saying that you need to spend money until you make money. However, that isn’t always necessarily true. There are some instances when you need to invest on good equipment and in hiring the right people in order for a business to turn into a well-oiled machine, but not to the extent that you’re already “faking it till you make it”.
Am I Spending Too Little?
On the flip side, there are entrepreneurs who err in the side of caution, holding on to a bare minimum expense until they reach a certain amount of cash-flow. The problem is, what if an excellent opportunity comes along and it’s exactly what your business needs to propel it to your cash-flow goal? Or what if you want to diversify your investments to prevent the inevitable?
If you simply don’t want to tap into your capital, then you can consider looking into various online loans. They can help you get the amount you need immediately, while at the same time, spreading that expense over the course of your monthly repayment scheme.
Mistake #2: Misreading Your Target Demographic
Here’s another miscalculation that new entrepreneurs usually miss: misreading the target demographic, or worse, completely missing the right target audience from the start!
Is There Really a High Demand for My Product or Service in My Target Demographic?
Some entrepreneurs believe that they know their target market from the inside out. Honestly, most of us don’t. For instance, one can make the mistake of believing that there’s a high demand for a certain product, and therefore price it too high leading to loss of sales.
Have I Targeted the Right Audience?
On the other hand, you’re probably on point in creating a high demand product or service. The problem might lie in the fact that you’re marketing it to the wrong group of people. For instance, let’s say that you want to create handmade journals. Your initial target market is students, when in fact, these journals are more in-demand with travelers and artists.
Mistake #3: Lack of Foundation
Finally, we’ve observed that a lot of new entrepreneurs simply lack the foundation needed to put up a business. There are different elements that make up a business, after all.
Do I Have a Solid Business Plan?
The first of them is a business plan. Never start any business without a plan. It should contain your financial goals, the actionable items you need to do to attain those goals, the details about your products and services, marketing strategy, and more.
Do I Have Enough Capital and Resources?
Do you have everything you need for the launch? Do you really need to buy all your equipment brand new? If you lack the funds, then you should know that there are loan for startup business options and other methods (like crowdfunding and finding angel investors) that you can explore to get the funds you need.
Do I Have the Necessary Skills?
Finally, it’s not enough to just be good at what you enjoy doing. It would immensely help if you understand the other aspects of your business as well, such as digital marketing and product photography. Fortunately, there are a lot of ways to learn new skills online.
There are other mistakes that an amateur entrepreneur can fall into, but the ones that we have mentioned above are those that you should never check in your checklist. We’re confident that taking the time to create a solid foundation for your business to stand on, hitting the bullseye in choosing the right target market, and carefully calculating all your risks right, will help you reach your ROI faster and attain business success for the long-term. Good luck!
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