Most Commonly Made Mistakes by New Companies
Posted by gbravo on September 17, 2008 in Business Start Up Advice [ 1 Comment ]
To be an entrepreneur you have to be a smart, driven and dedicated individual. But if that is the case, why do so many businesses fail within one year of their start-up date? Chances are, the principals of those failed businesses made one of the common mistakes below.
Starting out without a proper business plan
Starting a new company without a business plan is like going into the forest without a map. So to avoid turning your new company into The Blair Witch Project of your industry, it is highly recommended that you create a detailed, well-written business plan to map out mission, goals, financials and more. A professional business plan writer can help create a powerful business plan that will wow investors and keep you focused as well.
Expanding too fast
In pursuit of “playing with the big boys”, many new businesses run before they learn how to walk. Common mistakes businesses make in terms of expanding too fast include, adding unnecessary (at the time) employees during the first year of operation and leasing high-profile office space that is outside their means.
Running out of funding
Sometimes a business is poised to do great things, but never gets to that point because they run out of money first. Poor financial planning can sink a business quickly. Business owners should consult venture capitalists, financial advisors or accountants to help them obtain and maintain their capital. Another resource for funding is small business loans, once again a professional business plan is essential for the step.
Developing a poor marketing plan
Not focusing precious marketing dollars correctly is one of the most common and potentially devastating mistakes that a new business owner can make. Many businesses simply throw their money at a particular medium – such as magazine advertising or radio – without realizing that their customers simply can’t be found in these locations. Other times, businesses put forth a marketing campaign that fails to connect with the wants and desires of their customers. Business consultants and marketing firms can help small businesses alleviate this problem by taking on the planning and creative aspects of their marketing efforts.
Not creating a distinct brand
Branding is another overlooked necessity for new businesses. A powerful brand is what separates your company from the pack. A strong brand announces to the world your “voice” and point of view – and does so in a matter of seconds. Think of the great brands like Apple, Tiffany’s or Volkswagen – they all started with great, professional brand development. Find a qualified advertising agency or marketing firm to help create your business’ brand for today and the future.
Not mixing business with passion
Individuals who succeed in their start up ventures do so because they have an incredible passion for what they do. Their positivity is infectious – and converts new clients and investors alike into believers. Many businesses fail in their first year because the proprietors are unable to generate that spark with those people who matter most.
Giving up too fast
Some of history’s best business success stories began with failure. Individuals who start their own company must be prepared to weather some initial storms before throwing in the towel. Few businesses hit it big right away. But those who plan properly and hire the right people to assist them are the ones who hit it big.