Being a start-up business naturally makes you vulnerable to failure. If the set-up phase of your new enterprise is not done well, the chances of failure are increased further. This is why it is important to be made aware of the traps that have led to the demise of many other start-ups:
Not writing a business plan
It’s one thing to have an idea and head off straight into setting up the business, but without proper planning there can be much pain. A business plan helps you crystalize your ideas onto paper, and create a roadmap for a successful start-up and growth strategy. It helps you pre-empt potential problems and find ways of averting them early, as well as providing a clear picture of the necessary resources required.
Not having the same expectations as co-founders
Bringing in other people to kick off the business with funding or varied skills can be a great idea. However, it is important that all parties have the same expectations and share a common vision for the business. This avoids conflict of interest and breakdown at management level, which can lead to a collapse of the entire brand.
Insufficient cash flow
Before you start your business, you should have a clear understanding of how much it costs to run it. Such operating expenses or working capital subsequently need to be adequately budgeted for. You can start by researching the capital requirements for businesses of similar size and scope within your industry. You can similarly forecast profit margins and other key performance indicators.
It’s well known that one of the biggest advantages that small businesses possess is their ability to quickly adapt to variations in consumer and industry trends. Sticking rigidly to your plans can be your downfall, when it is glaringly apparent that market shifts are calling for a fresh or different stance.
Focusing on weaknesses instead of strengths
Where your strengths lie is the key recipe for success. So stop expending energy trying to fix weaknesses that can be addressed over time. Focus on what you are good at and what has caused you to secure business in the past.
Not being visible online
We have reached a time when a business’ legitimacy and trustworthiness is measured by the presence of a good website. You owe it to your brand and customers to be represented by a well-developed and presented website and related digital platforms.
These common start-up traps can be avoided with careful planning from the beginning. A business plan helps you develop a road map, while being flexible ensures that you quickly adapt to changes in consumer trends. Familiarising yourself with these and other pitfalls, when commencing your venture in today’s era of advancement, will serve you well as you build your business in the midst of competition.
Proudly brought to you by the National Small Business Chamber (NSBC).