Whether you are currently running a business or thinking of starting up a business, here are few things that you need to know to help you avoid the business to fail. These are also seven things that businessmen wish they knew before their business failed.
1. Exhausting Your Start Up Funds. Extra money runs the business. Without it, the business is almost impossible to survive. The most common mistake of new entrepreneurs is using up all their capital to launch the business and depend on the profit for the business expenses, bills and dues. There is a six-month-rule in starting up a business. During this period, all the business profits should go to the business alone. You shall not take anything from it to establish the business and let it grow. However, an extra cash is necessary for a lot of unexpected business expenses.
2. Concrete Plan. I know that it’s exciting when you first come up with an idea about a business you want to start up. However, planning for the launching and skipping on business goals and plans is not very smart thing to do. It is important to have a clear goal to come up with a perfect plan towards that goal. It is also good to have a monthly goal to make sure that the business is heading towards the business’ ultimate maturity.
3. Not to Trust the Wrong People. Hiring people is one thing you should not hurry. Do a background check and careful profiling when choosing the right people who will be working for you and with you. Making sure that your people understand the business goal and vision is one thing that should be included in the training. You have to make a clear instruction on how you expect them to work and what they can expect from you in return.
4. Having an Experienced Adviser. Sometimes, we get overwhelmed by our ideas that we neglect another people’s advice especially who are truly concern for us. It’s true that being a business owner means you always have the final say to everything but considering pieces of advice from other people is also not a bad idea. In fact, they can help us see things in a different perspective and provide us solutions to challenges we are facing. Another common mistake is asking advice from broke people. Start learning from people who are experienced and in a good status in life. Maybe you know a good businessman whose business is successful and running. Start hanging out with this people. Study them. Build strong connections with great and highly successful people. Be with people who you want to be like.
5. Knowledge on the Business Basics. People may argue that one person doesn’t really need a formal education to be a good businessman. Well, that is both right and wrong. It is true that some of the richest businessmen in the world are not graduate of business degree, as the best examples are Bill Gates and Mark Zuckerberg. However, no one can deny a fact that one of the world’s business geniuses have invested so much in studying business and one of them is Warren Buffet. Having knowledge on business basics is one of the most important thing when starting up a business. Although hiring a professional to handle finance matters, it is costly and not advisable for new entrepreneurs with limited budget and resources. Knowing the basics in business is automatically an edge in highly competitive business world. Spending some time to learn the business basics is not so difficult nowadays as almost everything is available on the internet. You may spend an hour a day studying the business basics or enroll yourself in some short course online. We also have some articles about business basics which you may want to check on the link here (insert link).
6. Background Study on the Market. Having an original idea is a great thing. However, the lack of background study on the market is one sure way to fail the business. Study your market first. Know your prospect clients. Know your competitors. Know the possible problems and plan a solution ahead of time. Once you have enough knowledge on your market, it will also be easy for you to come up with strategic marketing technique to be able to communicate your product or service well.
7. Reliable Network. This is one of the least priority of new entrepreneurs. They have invested their time so much in business launching, marketing and keeping the business running that they forgot the importance of networking. Sometimes, they deliberately eliminate network on the plan list. No business has ever succeeded for a long time without a strong support of a reliable network. Even countries need alliances. Affiliate yourself with group of businessmen and entrepreneurs who have good reputation and you can learn a lot from them. -M.D.
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