More than 50 per cent of the small businesses fail and pull down their shutters within five years of commencing operations because of some disastrous mistakes committed by their founders, who are mostly first-time entrepreneurs. One of the most common mistakes is not conducting any market research to confirm the business potential or to understand the target audience. If you launch a product or service that is not aligned with consumer needs or for which the market is too small, then there is no scope for turning your project into a successful business.
Another major mistake is teaming up with the wrong business partner instead of someone who has complementary skills and compatible temperament. Furthermore, in a bid to cut costs, some business owners hire unproven and inexperienced people thinking they can train these recruits to make up for their lack of experience. However, hiring wrong people can also sink your startup.
Some entrepreneurs don’t understand the importance of designing a powerful marketing strategy. Hence, they lose out market share to competitors and are unable to gain or retain customers. Failure of some startups can be attributed to not developing a proper marketing strategy as ineffective marketing plans and bad sales pitches can lead to dire consequences.
Furthermore, some SME owners commit the mistake of never interacting or communicating directly to their customers. Because of this, they would never know how their products can be improved or how they can better address the customers’ existing needs. They may also miss out on opportunities to foray into new markets. So it is crucial for every entrepreneur to regularly interact with customers and gather as much knowledge as possible to improve their products and services.
As an entrepreneur, if you can avoid or circumvent the mistakes mentioned above, then you will not only avert the chances of your business venture sinking, but you will be able to identify ample opportunities for building a very successful business enterprise.