Fear of failure should never be a reason for not pursuing your dream. Too often great ideas remain scribbled in a notebook that sits forgotten in a desk somewhere. Thinking your business could go into liquidation is no excuse for allowing your dream to remain forever an ungerminated seed. Nonetheless, as important as it is to take a leap of faith in yourself and your business, it beneficial for all budding businesses to be wary of pitfalls. While the assumed truth that 50% of startups fail has been disproved, this does not necessarily mean the odds are in your favor. There are a number of common hurdles that can stifle a promising startup in its early days. Here are four for you to consider…
Not knowing your market
You and everyone you know may think your business idea is the most paradigm shattering notion since sliced bread. You may be positively brimming with excitement as you plan to bring your products or services to the masses. However, if that enthusiasm is not shared by your target audience, your business could be met with a lukewarm reception.
For your startup to make waves in your industry, you need to know what your target audience wants. You also need to identify how competing businesses are currently failing to provide what your audience desires. By conducting market research you’ll be able to make key changes to your business plan and your products. This will help to ensure your brand resonates with the market. If you don’t know what your target audience wants, your initial sales and engagement could be disastrous.
Failing to do your due diligence on a business lender
Whatever the nature of your business, you may need to raise some form of startup capital. You may be eligible for government grant assistance. You’ll want to look into it as well as other sources of funding which don’t need to be paid back.
Even with this assistance, however, it’s possible you’ll need to do some borrowing. The good news is that in the digital age, it’s quicker and easier than ever to get access to funding. The bad news is there are more opportunities than ever to bury your new business in debt and prevent it from becoming profitable. As exciting as it may be to be approved for startup funding, make sure you do your due diligence on lenders by reading materials like these Rapid Advance reviews. Make sure you know all of the terms and conditions whether you’re borrowing startup funding or a bridging loan to tide you over in a seasonal slump. Which brings us to…
Borrowing too much (or not enough) for your startup costs
Applying for startup funding is a little like applying for a mortgage. It’s oh-so-tempting to aim for the upper limit of what you are allowed to borrow. But the more you borrow, the higher your monthly payments will be. You’ll also have to pay more in interest. This can put a stranglehold on your cash flow and prevent your business from becoming profitable (more on that in a moment). By the same token under-investing in your business can prevent you from being able to offer consumers the level of quality you can build a successful brand upon.
This is why it’s important to be realistic with yourself when composing your cash flow projections for your first year. You want to ensure you’ll be able to remain functional while still honoring your debts to your business lender.
Neglecting your cash flow
Cash flow is extremely important throughout your years of operation, but it’s especially important in your early years. Without liquidity, you risk defaulting on payments to your vendors and missing rent payments on your business premises. You won’t be able to take advantage of capital expenditures like equipment or inventory which could bring great opportunities with them. Take your eye off your finances for a moment and you’ll be surprised how quickly cash flow can dry up. That’s why it’s important to spend some time in your office, away from the operational aspects of your business, so you can focus on strategy and financial management.
If you’re thinking of taking the plunge and quitting the rat race for entrepreneurship, you’re to be commended. You are taking bold strides, going where most fear to tread. Yet, while confidence, even bullishness is admirable (and sometimes necessary) to get your startup off the ground, the last thing you need is to fall at the first hurdle. With enough awareness, knowledge, coaching, and preparations, you can avoid these common pitfalls which have brought many a startup to its knees. Clear those early hurdles and you’ll develop a framework for operational excellence and financial prudence as well as a reputation which will resonate with your target market.
Carolyn R. Owens has over 25 years of proven experience and serves as a Career Strategist, Leadership and Life Coach. She is the Chairwoman and CEO of Infinity Coaching, Inc. where they help you up-level your skills so you can up-level your income. Infinity Coaching, Inc. provides one-on-one and group coaching, organizational training, and personality assessments. Carolyn is certified to give both The Energy Leadership Index Assessment and Myers Briggs Type Indicator (MBTI) Assessment. You can find out more about both assessments and other products and services at https://infinitycoaching.net.
