1. Not conducting adequate research: Before starting any new business, you must survey product demand, supply, profit margin, investment and expenses related to your line of business.
Just jumping into a business because “it seems right” could prove to be a very costly mistake.
2. No passion: If you do not love what you are doing, then there is little or no chance that you will be able to continue in that business for any length of time.
Get into a business because you want to and not because you need to. You should be physically and mentally prepared to run your business.
3. Lack of funding and no management plan: If you have entered into a business without a concrete plan as to how much capital will be required to start, build, and sustain your business, then you might find yourself without enough money to perform basic business activities.
You should also hire the right employees, who not only have the motivation to work hard, but will also help you achieve your dreams.
Many new businesses fail because not enough thought was put into financial preparations or because management concerns were not addressed in a timely manner.
4. No marketing plan: You can have a great product line, but your customers will never know it unless you reach out to them. Keep part of your budget reserved for advertising and marketing, so that you can reach your target audience.
Your budget should allow you to advertise in newspapers, industry magazines and over the Internet. You can also distribute brochures or flyers of the products you sell and the services you offer in your neighborhood.
5. Not choosing a good location: You should always conduct a survey of your proposed business location so that you can be sure that your store will be viable in that area.
If your business sells industrial products, then your business should be easily accessible to your customers, suppliers, couriers and transporters. If you are planning to sell consumer items, then ample parking, lighting and security is essential.
6. Not being honest: If you are dishonest with your customers, or stock and sell questionable products, that reputation will spread quickly. Once customers find out the truth, they will not purchase your products and spread the word about your dishonest ways.
You should also be honest with whomever you do business with – whether they are suppliers, customers, or employees. Pay your bills in a timely fashion and be upfront about your expectations, so as to avoid any misunderstandings.
7. Poorly planned expansion plans: You should expand your business only when you are successful enough to do so. Plan carefully. Expanding at the wrong time will only put a strain on your finances and could leave you in financial ruin.
It is important that you understand the market conditions and your financial status before moving forward.
Being well prepared before you launch your new business will give you the best chances for success. Being aware of the information above will start you on your way.