5 Startup Red Flags to Steer Clear Of
Starting a new business can be exciting.
Unfortunately, many new businesses fail because entrepreneurs make common mistakes that ruin their startup’s chance at success.
Among the most common mistakes to avoid:
1. Not Identifying an Appropriate Market
Identifying your market is crucial to the future of your business. Find a balance between being too general and having too specific of a niche.
For example, if you open a business that offers general services, you might stand out from the competition and might not be able to meet the needs of customers looking for something specific.
However, if your business becomes too specialized, your narrow niche might not have a big enough market to sustain the business.
Your target market should depend on the needs of the people you want to serve. Take time to really think about the customers you want to serve and what you’ll need to offer to attract customers.
2. Not Creating a Marketing Strategy
Opening your small business doesn’t automatically mean you’ll have customers. You’ll need to market to potential customers to gain business.
However, many small businesses open their doors without clearly identifying how they plan to reach potential customers. Simply saying, “We’ll advertise online,” won’t cut it.
Instead, develop several specific marketing strategies. Decide when to launch your marketing efforts and how to track which marketing campaigns are most effective.
3. Failing to Budget Appropriately
Many small businesses close their doors within the first few months because they underestimated how much it was going to cost to keep the business running.
A clear business plan should include a budget.
Don’t count on becoming inundated with business during the first few months as it can take a long time to start earning a profit.
Instead, develop a plan for how you’ll keep the doors open and how much you’ll allocate to various expenses.
4. Launching the Business too Early
The excitement of starting a small business can make some startups launch the business too early. If you decide to open your doors before you’re ready, it can hurt your business in the long run.
For example, if you’re telling customers’ things like, “We don’t offer that now but we hope to soon,” it may turn potential customers away. They may view your business as poorly managed and might not return later.
Instead, make sure your business is fully operational and functional before you launch it.
Otherwise, you’re likely to create more frustration and it will be even more difficult to get things ready once you’re already trying to run the business.
5. Not Hiring the Right Professionals
Many small business owners want to save money by doing everything themselves. However, it can cost you more in the long run.
For example, if you attempt to create your own website and you don’t really have a good handle on what you’re doing, you can make mistakes that prevent your business from attracting new customers.
In addition to hiring a professional website builder, considering hiring an accountant and lawyer. Preventing costly mistakes can save you a lot of time and money.
Avoid the most common and costly mistakes when getting your business off the ground and increase the likelihood that your startup will become successful.
About the Author: Amy Morin writes about psychology and business and helps businesses improve their reputation. She has written for a number of sites over the years, including MediaShower.com.