Did you know 90 percent of startup ventures fail in the first year? Only a handful of ventures go on to be celebrated as success stories.
So, what could be the reason that some businesses fail while others are able to penetrate markets, slash competition and hoist their brand power?
It is due to mistakes, some caused due to inadvertence and others due to ignorance. Here are some big mistakes that small business owners make that end up hurting their ventures.
Know them, learn from them and steer away from them to turn your business into a success.
1. Lacking a long-term vision
As Jack Welch says it, it is business vision that drives a business to success. The vision needs to be long-term, stretching into the future so the resources and efforts of the organization are driven in a single direction.
Lacking a long-term vision and working to achieve short-term results like short-term profits can hurt the business. Employees will lack a drive to reach a goal and might even resort to unethical tactics that will hurt your brand’s image.
2. A cluttered workplace
For a small business, focus is the only way forward. A cluttered workplace where communication and collaboration fails will lead to demise. The solution: a virtual PBX. Businesses small and big are automating their communication systems so employees, vendors and everyone else can stay in the loop.
The biggest draw of a virtual PBX is that it is ready to go without any waiting time for installation. Secondly, these devices are literally maintenance free, they do not have any tech specifications or routines that need to be carried out, saving time and effort. These systems take away the pain in communication and organization and help the business move smoothly without being bogged down by distractions.
3. Missing a viable revenue model
How are you going to earn revenue? Is it through direct product sales, or freemium or a subscription model? In the end, the success of a business is entirely decided by how much revenue and profits it can make.
Failing to put in place a viable revenue model is like digging a grave for your business right from the beginning.
4. Taking customers for granted
Customers are real people who take money out of their wallets and pay for your product or service. They are the revenue source for your business. Taking for granted their preferences and failing to meet their expectations will tank your business.
Secondly, when it comes to word-of-mouth marketing, customers are a force to reckon with. They spread news about a company, both good and bad, rapidly like a forest fire. So, a business and a brand that fails to take care of its customers is not going to last for long. Take care of them and it will rule forever like Apple, Microsoft, Nike and others.
5. Not keeping pace with market dynamics
Between yesterday and today, the market will have changed. Digitally connected customers change their tastes at the drop of a hat. Above all, competition gets ahead with breakthroughs, thought technology and marketing.
Staying on top of these requires a small business to have a finger on the pulse of market dynamics. You must track customer behavior and understand their preferences as well as know what new strategies competitors are using to outwit the market and disrupt the industry.
6. Splurging money on non-essentials
A small-scale business or a startup is always thirsty for funding. When the money comes, spend it on essentials such as network connectivity, customer service and product research. Spending the money on non-essentials like founder parties or fancy offices will drain the funding without creating any value.
This non-essential spending will leave little in the bank when the business needs money to scale up. As a result, it will lose its momentum and end up as another failure, when it could have been a success.
The lesson: Spend on necessities: the essentials that will build up the business rather than on creature comforts for the office.
7. Taking competition lightly
Competition kills more businesses than mistakes made by the founders. Cut-throat competition is not a random term. It literally stands for the market scenario where businesses are ready to hurt their rivals through price cutting, rival advertising and similar tactics.
Without a basic understanding of the market and how competition is working, the business is bound to fail. The trick is to always move few paces ahead of your competition so that your business stays afloat and does not get trampled.
8. Having a weak Marketing Strategy
‘Marketing’ and ‘Strategy’ were two words that were not used together in the past. But in the recent years, strategizing the marketing of a business is essential just to survive in the highly competitive market.
A marketing strategy will drive the product straight to your target audience. But, the choice of channel to reach customers and its effectiveness is something that needs extensive planning. Having an unclear and inconsistent marketing strategy is a big mistake that small business owners must stay clear of.
Running a small business is like running a marathon. Even the tiniest mistake can stall you. Like preparing for a marathon, managing a small business also requires owners to plan in detail every section and operation of the venture.
Right from putting in writing a viable revenue model to getting the right marketing strategy to slash the competition, there are so many things to get right for the business to succeed.
Most importantly, it needs to invest in top-notch customer service. A small business that ignores customer service is sure to fail in the long-term.
Steer clear of these major mistakes and take your business to new heights of success.
Kunjal Panchal is a digital strategist and a social media geek. She is passionate about content marketing and strongly believes in the power of storytelling for marketing. A perfect day for her consists of reading her favorite author with a hot cuppa coffee. Find her on Twitter and LinkedIn.