Business owners may initially make a healthy profit when they start up, but around 50-55 percent of them will fail within the first few years. There are a few common mistakes that most startups do that often results in failure during the long run. To analyze the pros and cons of the business a new owner is about to start, should have a sound knowledge of the product and should do an extensive market research. Finance management is the most important aspect. Getting expert help from a mentor should do wonders to your business in the long term. Here are few tips that will let you figure out what you need to avoid in a startup company.
Financial planning and management:
Most startup companies focus on increasing the sales volume of their product, to record a net profit for their first financial year. This is based on the investment gone into starting up a new business. Rather than focusing on increasing profits, it is important to build a solid foundation for your business using trial and error methods. Working out a work flow order that is both feasible and effective, right from management to the junior staffing, there has to be enough financial security to run and sustain the business for a year, this is due to random cost projections that normally happen in startup businesses.
A consistent business plan is key to a successful business. This can be obtained only by a proper channel of communication and work flow between all the departments to get a positive output. Lack of communication between departments in getting regular updates often affects the quality and the quantity of the product. Not having regular board meetings to discuss the growth of the company, is something that needs to be followed weekly or fortnightly. Only then will all the parts start falling into place and the business will run smoothly like a well oiled machine. Implementing new methods to try and develop your business must be done under guidance from a Mentor or get an expert’s opinion.
Know your Competition:
It is always good to be aware of your competitors. Never underestimate or overestimate the product of your competition. There is bound to be competition for any product available in the market. The idea is to not compete with competitors initially; rather the focus has to be on marketing and advertizing your product until it has built a standard reputation for itself. Once your product has become popular and when there is a demand for it in the market, this is when you start comparing your product with others to find ways to improve and upgrade your product. It is also important to keep a close watch on the market for new competition and to watch out for any drastic changes that would affect the business in anyway.