Working for yourself and being economically independent is very attractive to most people. However, what people fail to understand is that creating and running your own business requires hours of work and dedication. Sustaining a business in the hand of profit takes a genuine interest in the business as well as perseverance. To keep your business running you must rake in profit or else face the seriousness of a financial decline. Statistics show that most start-ups fail their first year. They are not able to keep up with the financial strain put on them. So the question raised here is why? Why is your start-up not earning well? Here are some of the common mistakes that business owners make that causes your business to go into loss.
Not catering to your niche market will kill your business
As a newly opened business, your main aim is to increase your customer base as much as you can. Any business advisor will advise you to do this because it will help you earn profits. However, what business owners often forget to do is cater to the niche population that is the focal point of your business. The customer is king. That is true, but it’s important to keep your niche population in mind.
The reason why business advisors make you cater to a niche population is that it helps you concentrate your product or service on a certain population. This in turn will help in advertising, marketing etc. When you start catering your business to everyone it limits your ability to make certain decisions to help grow your company. Customer retention is imperative for a company to survive so start-ups should start focusing on this aspect.
Never ignore team building
As a business owner, it’s only natural for you to want to make all the decisions of the company on your own. The business is like the baby of the business owner so it’s natural to want to have control. However, as your business expands you require a team that you can trust. You must be willing to delegate work to your team and trust that they will do the work well. Hire people who you know are experts in their field.
One thing that many start-up owners do is hire their friends or family even though they don’t have the necessary qualifications. Most business advisors will advise against this. When you start a business, you must hire qualified and professional employees who can help build your brand and company.
Lack of vision
on is a very important factor that helps build your business. Most start-ups feel that since they are a new business, they do not need to focus much on vision and instead must focus on profit. This mind-set however causes a lot of businesses to shut down. Vision is not limited to larger MNCs and start-ups. Having a vision for your company is important so that you know where you want your business to lead in the coming years. Your vision for your business must incorporate itself into the business plan that you create for your company. Having a vision for your business also allows you to be flexible and adapt quickly in times of change. Based on the judgement that you acquire through your visionary process you can positively change your business.
For your vision to be clear it’s important to create a business plan for your start-up. A business advisor will always tell you to create a business plan so that all the ideas and thoughts you have concerning the business are put down on paper. Further for any newly formed start-up, the best way to incorporate that vision you have is by having a complete business plan. Your business plan should also include a One-Page Business Plan. I have developed a one-page business plan for all start-up founders and entrepreneurs. This business plan helps you ideate what you would like to achieve the following year as well as the activities you are willing to give up. It helps you to understand the shortcomings of the previous year as well.
If you see your business declining, it’s important to ask for help. You should not let your ego come in the way of business. You should do everything that will help your business in the long run.
About Devansh Lakhani
Director of Lakhani Financial Services, and a Chartered Accountant, he helps start-ups raise funds from his network of investors. He guides and advises start-ups to scale up by providing efficient sales, marketing, team building, and business management strategies. He has executed fundraising by block deals on the stock exchange and conducted IPOs and right issues on the SME platform to the tune of over Rs. 50 Crore. He is currently working with start-ups from various sectors to help them channelize their business models and investments.
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