Any entrepreneur knows that starting a small business is a risky procedure. So many new businesses fail, often for simple reasons. Here are a few pitfalls to avoid, especially within your first year, as suggested in the article “4 Reasons Small Businesses Fail”:
This is probably the largest and most obvious challenge for start up businesses. Even if someone has a great idea or product, people often underestimate how much money is required to get a business off the ground. Major expenses include start up costs, expansion, purchases for inventory, and fortifying your business. Carefully calculate the true bottom-line cost of starting your business, and look into the Small Business Administration loans often available to entrepreneurs.
#2 Getting the Word Out
Successful marketing is a huge part of getting a business going, but so many entrepreneurs aren’t fully utilizing modern technology to market their services or products. Small businesses might not be able to invest the money in marketing that big companies can, but there are many cost-efficient ways to market, such as using ratings and reviews, analytics, live chat, and more. Small businesses might be less visible, but they are also more nimble, especially in an age where online shopping is becoming more and more popular.
#3 Poor Management
While setting up efficient systems and processes isn’t the most fun part of the new venture, inconsistencies in these areas can hurt customer satisfaction and ultimately the business’s bottom-line. These tasks include marketing, customer relationship management, inventory management, and accounting processes.
Just because a small business is successful in the beginning does not guarantee continued success. Small businesses need to keep an eye on their industries and evolve accordingly. This can be difficult for entrepreneurs, who are often already overworked and acting in many different roles, but keeping an eye on the direction of your business and the climate of your industry is well worth the time investment.
If your small businesses is just starting out, be aware of the pitfalls that have led to the failures of other small businesses. It can be difficult to wrap your mind around every aspect of starting a new business, but don’t let yours go under because you neglected something as obvious as marketing or finding the right loans.