Hello future entrepreneurs!
Starting a business has become more popular than ever, generally everyone thinks about starting a business. The rewards of being your own boss can be appealing, but it’s important to keep in mind that starting a new business can be quite risky. According to the Small Business Administration (The SBA) – close to 66% of small businesses will survive their first 2 years and nearly 50% of businesses fail during the first year in business. It’s important that be take the cautious steps to avoid being apart of that 50% failure statistic. If you are thinking about a business, it’s a beneficial to learn from other’s mistakes to set yourself up for success. Here are three common mistakes to avoid:
MISTAKE #1 – NOT PLANNING FOR FAILURE
– You should always plan for worst-case scenarios. What if you were to lose one of your biggest clients? How would that impact your cash flow? What if a new company hits the market and wipe your business out? You don’t want any of these things to happen, but it’s necessary to plan for them. Planning for failure helps anticipate challenges so you can prevent them from happening.
MISTAKE # 2 NOT KNOWING IF THERE IS A DEMAND FOR YOUR PRODUCT OR SERVICE!
– Never over estimate demand, make sure that your product or service is needed by someone other than yourself. For instance, You create this crazy flavored peanut butter & ranch flavored dip that taste so great to you, how do you know it will sell. Just because you like it doesn’t mean others will. Before launching your business, find out how strong the demand is for your product or service. Is it a product or service that most people need or want? Does it fit with current trends?
MISTAKE #3 STEPPING INTO A CROWED MARKET WITHOUT A COMPETITIVE ADVANTAGE
– Make sure you have a competitive advantage that stands out.Before you try to build a business around your talent, think about how you are going to distinguish your business from every other business that is similar to yours. It’s important to consider factors like price, appearance, decor, advertising and other aspects that define how customers will set your business apart. Without a well-defined competitive advantage it will be difficult to compete in a marketplace with highly successful businesses.
How will you increase your chances of being among the 50 percent of businesses that make it within the first year?