Mistakes That Affect New Business
Starting a new business is a dream come true for most people. Having your own business gives you freedom. It allows you to work under your own rules and sets you on that crucial path to financial freedom. Unfortunately in many cases, the dream remains just that due to a number of common mistakes. Let’s take a look.
No matter how much research you carry out before starting a business, some matters will still catch you unaware. Do you continue on your predetermined path or do you change to accommodate these changes?
Let’s say you’re seeking to venture into the aviation industry. You choose to deal in tail wheel brakes & wheels and related accessories. Since you’ve established there’s a ready market, you go ahead to formulate a superior and more durable version of what is already in the market. However, the manufacturing costs end up being much higher than you anticipated.
Can you consider striking up a licensing deal with established manufacturing companies where you can negotiate to receive royalties? Or will you stick to the initial plan where you manufacture yourself? Being flexible will ensure that you break even faster.
You could go on and on about how unique your business idea is. You think that as soon as you sell to the few first customers, word will spread like bush fire and clients will come flocking in. You want the consumers to see the product through your eyes. Often, this is not the case.
Consumers habitually stick to the products they’ve tried and tested over time. They will inevitably stick to their old ways of doing things. It will take time and effort to win them to your side. This calls for a good marketing plan, backed by a reasonable budget. If you fail to market properly, your product won’t sell, even as phenomenal as it is. You can reduce your marketing budget gradually as your product gains footing in the market.
Leaving employment to set up your own business is definitely exciting. It must be the reason why most people do so rather hurriedly. But remember, you still have responsibilities. You still have bills to pay, and a family to take care of. In addition, you now have employees looking up to you every end month.
Considering the business might take some time to yield substantial returns, do you have enough money saved to cover these expenses? Consider the possibility of an emergency loan if need be.
Hiring the Wrong People
Professionals do not come cheap. At a time when you want to keep your operating costs low, you might be tempted to hire cheap labor. You might want to hire some random friends, relatives, or students looking for an extra coin to do specialized tasks. You will save some coins alright; but hiring the people without proper skills just to save will cost you in the long term. You’re likely to end up with cases of mismanagement which will manifest in the final product.
If you’re not in a position to hire professional staff at the beginning, you can outsource. Avoid the temptation of doing everything as well. You can’t be the accountant, HR manager, product supervisor, auditor….give a chance for the experts to do what they do best.
Not Planning for Hiccups
Do not plan only for ideal situations. What if things do not turn out as anticipated? The licensing procedures can take much longer than expected. The operating costs can be much higher. Your employees can leave when you least expect it. Do you have a plan B? This should keep you from being knocked off your feet in case of any eventualities.
Avoid these mistakes and increase the chances of running a sustainable business that you can pass on to the generations to come.