"Knowledge has three degrees — opinion, science, illumination. The means or instrument of the first is sense; of the second, dialectic; of the third, intuition. "
Often, coming up with a small business idea can be as easy as identifying a problem in your local surroundings and finding a solution to it. But there’s a reason why a lot of small businesses fail in their first year. There are also many things that can contribute to its downfall.
Experts say that the first year of a venture is the most important one. It can make or break your entire business if you make even one mistake. Staying focused and handling the initial hurdles delicately is the key to survival.
To help you out, here are some common small business mistakes that you should avoid:-
1. Half-prepared entry into the Market
This is a common mistake that a first-time entrepreneur is prone to make, but it is also easily avoidable. Often, while starting their ventures, entrepreneurs can be swayed by their own vision and ideas so much that they fail to factor in several key elements that are required to make their vision a reality.
Do you have enough employees to support your business? Have you thought about a viable revenue model? Do you know who your competitors? Any future strategies that will help you grow past the initial stage? All these things need to be addressed before starting your small business.
2. Ignoring the importance of Research and Analytics
Another easily avoidable mistake that most entrepreneurs starting their own businesses make is discounting the pivotal role data analytics and market research can make to your business.
Data analytic tools have improved to such a great extent today that they are able to identify and predict market trends and consumer behavioural patterns much before they even occur. Leveraging these tools could give your business a big boost.
Moreover, conducting some market research can also help you to identify the target demographic for your product or service, which will make it easier for you to decide on the optimal brand positioning.
3. Focusing on Short Term Gains
Most entrepreneurs often lose sight of the bigger picture in order to secure short-term gains. Instead, the effort should be on building professional relationships with clients that will last, in order to ensure repeatable business.
4. A Rigid Business Model
One of the most frequent mistakes that entrepreneurs make is getting too attached to their idea. It sounded amazing at first and looked good on the drawing board. However, always create an agile business model that will help your small business survive the rough and tumble of the real market.
5. Disregarding the importance of contracts and legal documents
Never get into any arrangement without defining the contract. You and your clients mutually decide and agree upon the terms and conditions when entering into a business deal. A contract is a documented proof of that agreement.
Also, always ensure that you cover your legal bases in all your business dealings with clients or with auxiliary service providers.
6. Modeling your Small Business on Short-term Trends
Joining a particularly popular trend is a needless pit that entrepreneurs often end up jumping into. Needless to say, most of these startups end up failing to survive beyond the initial few years.
Remember, trends come and go. In this digital age where people have the attention span of a goldfish, what is popular today may not be popular tomorrow. Therefore, if you are in it for the long haul, always devise your products in a way that addresses the market gaps instead of trends.
7. Focusing too much on the idea instead of on the team
A great business has a great idea at its core, but simultaneously, it also has a great team working hard to make that idea a success. While the idea that you have come up with might be very good in itself, you also need to hire individuals who can support the long term vision of your small business.