For start-ups, launching the business is just the beginning. According to the Bureau of Labor Statistics, 20% of small businesses fail in their first year and 30% fail in their second year.
So how do you set your business up for smooth operations and continued success? We’ve studied the stories of various business owners and compiled 5 common mistakes made by start-ups you can refer to while running your new business!
Creating a business from scratch involves a lot of work.
There’s bound to be documents upon documents of research, business strategies or budget plans. Although the new era of technology has enabled us to keep everything niftily in a single Google Drive, staying organized digitally can still be a challenge.
In an article by Archive One, Microsoft’s document management partner, losing important paperwork can lead to dire consequences.
Lost data reports can lead to poor decision making on sensitive issues such as sales directions or growth strategies. On a more consequential scale, losing legal documents can result in expensive legal proceedings that can place large financial burdens on small firms.
Having a clear organisational system for all your business documents from the get-go can prevent problems in the future.
Finding tax invoices from last year? Looking for that competitor analysis you did 5 months ago? When you can find things when you need them, it makes for one less worry when running your business.
Don’t forget to schedule a regular decluttering of your files. This makes sure that your document system remains neat and relevant at all times!
2. Expanding too quickly
Based on a joint study by Kauffman Foundation and Inc., only 1 of 3 fast-growing businesses are able to succeed in the long run.
Research has shown that start-ups who jump into expansion at the first sign of high profits tend to find their costs unsustainable in the long run.
This could be due to the declining relevance of the products or a failure to plan a long-term marketing strategy.
Patience in business has its rewards. While it can be tempting to receive instant gratification by expanding quickly and directly increasing profits in the short run, an under-developed product or business direction could easily lead things south.
3. Undervaluing your product or service
Running frequent sales is a sure-fire way to increase short term profits and generate interest in your business. Contrarily it can also be detrimental in the long run.
Holding occasional sales to clear outdated stock and hopping on seasonal shopping trends can be beneficial, but it is important to consider the value of your product for your target audience.
The value of the product is one of the first things start-ups should pitch to their potential customers. What is the customer gaining when they purchase your product? Is it worth the amount of money they are paying to purchase it?
As the business owner you have to be the person to set the first narrative. The best way is to set a price that represents the value your product claims to bring to its customers.
Without a doubt, the quality of the product has to meet the expectations set by your price. However, constantly charging low prices may also be leading customers to feel that your products have low value to them. Take these considerations into account when setting a price for your product or service!
4. Holding back on marketing
With digitization comes the increase in information sources that people have access to.
Marketing budgets could be kept lean in the past by strategically picking several advertising channels that worked best.
The advent of the Internet has led to the need for businesses to invest in multiple marketing campaigns to get their brand and products into the public eye.
In order to capture the attention of the audience who are searching for the products or services your business provides, your business has to be one that’s easily found.
Consistently putting out value-adding content and compelling ads can ensure that your business maintains high visibility for your customers.
Creating content and running ads may seem like a big commitment for a start-up, but a well-planned marketing strategy rarely disappoints in the long run.
5. Handling it all by yourself
Many start-up owners tend to rely on themselves and believe that delegating important tasks could heavily impact their product. It’s true only because delegating important tasks to people who specialise in them could bring your business idea forward in leaps and bounds.
Most businesses begin with an initial core idea and product. As they expand, it becomes harder to manage everything alone or with just a small team.
Outsourcing then becomes a viable option.
You can get things done by specialised experts and you don’t have to pay for an in-house specialist. Why hire an in-house translator when you could have your documents translated and billed on a project basis?
However, it’s important to choose the functions you wish to outsource very carefully. Start-ups are recommended to outsource their non-core and non-essential functions to professional freelancers to receive quality work at competitive prices. Find the services you need on Gigworks today!