Starting a new business is always a risky voyage. The possibilities of failure are huge. Though failures are inevitable and you should take them as lessons in your career, there is no harm in taking precautions to avoid some of them; you can attempt to prevent at least the common ones.
Here is a list of common failures faced by start-ups by One Internet.
- 1. Don’t know whom to sell
This is one big mistake most of the starters make while trying hands at business – they don’t have a clearly defined target audience. You must know the answers to all the elements of the WH family, i.e., what, where, who, whom and how.
The most dreadful way to settle this question is to think that everybody is a potential customer to a business. Even if everybody is, you must divide your audience into sections. Marketing and advertising strategies depend a lot the specific group of target audience. An undefined target audience can make all your efforts go in vein.
- 2. Don’t count your own network as potential customers
It sometimes becomes uncomfortable to sell your products into your network. But, common! It is not wrong. The best way to spread your business is through word of mouth and who can do it better than your friends! You might feel awkward initially, but if you cannot convince the known ones about your product, how can you market it to the others.
Your network is your asset. Use it as a test market, you will also get honest reviews which will help you to improve your product.
- 3. No aggressiveness in sales
Sales is after all the prime aim of business and also an indication of the success of the business. Set target dates, or weekly/ monthly sales targets, try to achieve them. In case, the targets are not achieved, find out the reason, work on them and generate profitable outcome the next time. If you are able to achieve sales target, set higher target for the next time. Show aggression when it comes to s, because that is the ultimate goal at the end.
- 4. Set prices too low
If you are a beginner, you might follow the simple cost plus model while setting price for your product. Instead, you should calculate on the basis of the value your product brings to the customer, and not on the basis of the cost incurred to make the product or doing the work.
Figure out the value your product brings and then charge your customers accordingly. Prices too low or too high, both are harmful for the business growth.
- 5. Focusing on revenue and not on profit
Selling is important, but selling at loss is a big no no! You should sell and stay at profit. Don’t focus on the number of units you sell, rather concentrate on the total profit earned after the sales in a fixed period of time.
Experts advise to keep a check and work towards fetching more and more profit out of each transaction, rather than just making transactions. Selling at a loss would soon land you to the closure of your business.
It is good to make your own mistakes and learn from them. But it is even smarter to avoid the obvious, common and known ones. Find out more reasons why start-ups fail and work to prevent them.
One internet wishes best of luck to all the aspiring business persons and the ones who wish to commence their start-ups. We welcome you with open arms to start your business with our co-working office space in New Delhi.