Contributed article in our entrepreneurial series. Enjoy! – Kimberly
Starting a new business is an exciting but busy time. Your to-do list is as long as your arm, and unfortunately, you only have a limited number of hours each day to achieve them. It can be overwhelming, but you need to have the discipline and resilience to carry on and make an impact.
New entrepreneurs are vulnerable to making the same mistakes time over, and so you need to be vigilant that you don’t fall into the same trap. Here are three mistakes that you need to avoid.
- Not Understanding the Value of Money
Startups invariably have limited cash flow, and that means that money is at the forefront of every decision being made. New entrepreneurs typically fall into one of two camps: those that spend money freely to make more money and those that spend the bare minimum. You must understand the value of your money.
Understand what a good transaction is, and one you need to avoid. It’s a fine line between the two, and you must achieve a balance. You need to invest your money to get a good return, so before you agree to a transaction, you need to evaluate the value it brings to your business. Above all, aim for quality.
- Not Understanding What Your Target Customers Want
You may think that you know who your target customers are and what they want from the products and services that you offer, but the reality can be very different. You must not second-guess the motivations and likes of your target audience. You will find that if you neglect to understand your target customers, you are limiting the success of your business.
Market research is essential. Friends and family will give you their opinions on your offerings, but they are likely from the same demographic as you and their thoughts will be emotion led. Focus groups give unbiased responses and will give you a true picture of your products and services. You will then be able to tweak your business in accordance with metrics and not emotional and biased responses.
- Not Researching Competitors
Unless you are inventing something completely new, there is rarely an occasion when you will have no competition. No matter how unique you think your products or services are, there will be another company that offers the same. You need to research your competition. You need to have a clear understanding of their strengths and weaknesses so that you can identify how your business can better them and gain the competitive edge.
Go online and find your competitors, even if they are in another state or country you will be able to learn a great deal from their online presence. Reviews are a great way to get an insight into their business and how their customers react to them. You need to look for signals that indicate their successes and flaws, and you will be able to incorporate them into your business. For example, expensive delivery costs, poor customer care or incomplete orders.
You have many balls to juggle to make a success of your business. While making money is your goal, you need to ensure that you create a sustainable business for the long term. Spend your money wisely by evaluating the value that your purchase will bring to your business. Know your customers and your competition to make you the market leader.
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