Based on my past experiences consulting for companies and my observation of failing start-ups, I noticed that these are the 5 most common mistakes that businesses make that resulted in them doing poorly in business.
1. Forgetting about market research
Many business owners are so involved in their product development that they forget about market research, that should be done before and vis-a-vis the development. Conducting market research early is vital because it helps validate your business idea and it should be a continual process as you develop your product as it helps you improvise.
You never know if your assumption about your consumers’ preferences is right, so always check if they like your idea and prototype, if they don’t, you still have time to adjust according to their needs and wants.
2. Neglecting sales & marketing strategies
There’s a tendency for business owners to be excited about their product launch. They spend time working on the product and only start to think about the sales and marketing strategies when the product has completed.
Do you know that you could market your product first even before the launch? Successful businesses are those that execute their marketing strategies early and are able to create pre-launch sales. How cool is that?! Marketing your product early allows you to test the market, product, and strategies, so that you would know what to expect when your product is being launched.
3. Being too involved in everything
Most business owners start off by doing everything themselves and that includes sourcing for inventory, design, marketing, sales, flyering, accounting, planning, hiring, etc. However over time, once the business takes off, the owner should focus on more important aspects of the business, and that is bringing in sales and be more involved in partnerships.
Once the business is profitable, one should consider outsourcing menial activities such as flyering, designing or accounting (unless there’s no one else doing the job) because these activities take a lot of your time and do not bring you ROI. TIme is money too!
4. No business plan
People talk about business ideas a lot but what about the business plans? Have you documented your visions, missions, ideas, strategies, milestones, research, forecasting and plan on a business plan? People think that they should only create a business plan when an investor or shareholder needs it. No! The business plan should be developed right at the beginning and it is meant for you to refer to, update and follow through. Very often people do as they think. They need to plan, follow their schedule and follow through their milestones which are documented in the business plan. It makes it easier for you to relay your visions and missions to your future shareholders, colleagues and investors.
5. Underestimating costs
One should do forecasting of costs before any execution to ensure that the plans ahead can help you generate sufficient profits. Always factor in miscellaneous costs because you would never know what may crop up or if you have a change in vendors. Have an idea what your profit margin should be and work towards achieving it. It is always better to overestimate than underestimate.
Written by Renee Tan, Founder & MD of Rendeur, H.E.R Entrepreneur. Renee inspires, educate and empower aspiring women entrepreneurs, besides educating corporate professionals in excelling in functional skill sets such as sales, marketing, customer service, exhibition strategies and communication skills. She was in B2B media where she led teams as a General Manager and was the top sales professional clinching more than $1M of sales individually in a year.
Video is taken at The Co. at Duxton.