New investors look forward to establishing ventures and growing them into business empires with huge sales and sustained high profitability. However, the poignant news of business closing down immediately after start up or within one year of operations has become a common occurrence. Unless appropriate planning is adopted, entrepreneurs risk loosing their investments especially in the modern highly competitive business environment. It is prudent to take cognisance of major mistakes that many investors make even before starting their businesses.
Not assessing personal strengths and weaknesses
Every entrepreneur holds personal strengths that can be built upon to succeed faster and weaknesses that risk sinking his venture when not carefully understood. Failing to evaluate and understand personal strengths is a great risk for any business because the entrepreneur cannot take advantage of his strengths to get a competitive advantage. In addition, failure to cite and address areas of weaknesses leaves the investor exposed to competitors who will always use such shortcomings to outdo the new entrant. Entrepreneurs should frequently review themselves and build on strong areas while addressing their shortcomings to outdo competitors.
Failing to look for adequate start-up money
Business capital is critical for installation of appropriate systems and initial running of any enterprise. Failing to seek adequate capital before start up is a recipe for many troubles and hiccups as a business commences. Looking for adequate capital allows a business to kick off and continue running until it becomes self sustaining. Without adequate start up finance, a business is forced to run with limited staff and without some facilities which can limit the ultimate growth capacity. It is crucial to look for capital using all legally accepted methods for a business to start and run smoothly in line with an investors short and long term goals.
Not taking and kind of business insurance
Every new entrepreneurial investment is a risk that is subject to many dynamic forces which can bring it down. Taking the appropriate business insurance helps to protect your investment from theft, fire, dishonest employees, and other risks that can result to loses and even closure. Many entrepreneurs often overlook this factor by terming it as an avoidable expense. When misfortunes occur, the devastating impacts result to great losses that leave the entrepreneurs with limited possibility of ever rising again.
Not contracting the right people
Running a new business enterprise demands input from experts who help in adoption of articulate customer attraction models, marketing, accounting, and even branding. Some entrepreneurs think they can contract any person or even run key operations of their businesses as a cost cutting effort. This results to poor strategies and holistic limitation of a business potential. This mistake is very serious and a business can easily collapse from reduced sales and insolvency. In order to succeed in any business venture, it is important to look for highly qualified and experienced people to carry out different roles.
Failing to bother about online marketing
Online marketing has become one of the greatest things in the modern business world because of associated ease in reaching, persuading, and winning more buyers within a short period of time. Failing to bother about online marketing is a serious limitation for a business. The amount of sales that can be realised offline is very low because more people are doing their shopping online. This mistake further raises the cost of marketing because conventional methods are very costly. Before starting a business, it is critical to comprehensively evaluate how online marketing can hep a business grow faster and keep changing with societal demands.
If you understand and avoid making the outlined mistakes, you can be sure to start a new venture and operate it to meet all the short and long term projections.
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