Starting a Small Business with Hopes and Dreams
It is with much hope that every entrepreneur sets off starting a Small Business. Making money was his main objective. Failure was never in his mind, but things don’t seem to happen the way he had planned. Even the hope for Survival seems to have disappeared, and Failure haunts him at every turn. Why does this happen so often to numerous small business entrepreneurs?
1. Improper or No Research:
The most fundamental thing to do before starting a small business is to do market research to find out whether there is sufficient demand for the product or products you have to offer.
If the market is saturated, there may be no need for your product, and no way to generate funds. The need for your product in your area of business activity should be your prime consideration before starting a small business. Only if there is sufficient demand for your products, you will be able to generate the funds necessary to help you run your small business, survive and succeed.
2. Improper or Under Funding:
Quite often the urge to start a small business is so great that the very vital aspect of funding is not given due importance. Businesses tend to start with a shoestring budget and shops open with very little stock and offices with insufficient equipment. It is essential to have proper funding in place so that you may purchase stock and equipment before commencing your business. Furthermore, your business might take several months to start making a profit, and hence funds are necessary to help your small business survive and keep your morale up during these early months.
If you don’t have sufficient funds of your own, it will be wise and proper to obtain a loan before starting your business. Your bank can provide this loan, or you can seek the assistance of the Small Business Administration which offers numerous loan programs to assist Small Businesses.
It is important to note that the SBA acts primarily as a guarantor of loans made by private and other institutions.
Taking huge loans which are out of proportion to your needs can also be detrimental to your small business due to the resulting higher interest payments.
3. Insufficient Advertisement and Promotion:
No Business can be successful unless the public is made aware of the existence of your small business and its products. The best equipment and stocks cannot generate sales unless the public is made aware of it. Hence advertising your small business and the products before the commencement of your business and after that should be a major consideration. Failure to do so has been the cause of failure of several small businesses.
4. Unnecessary expenditure:
One of the major causes of the failure of a small business is the improper handling of the funds. Extravagant expenditure at the initial stages such as the purchase of expensive cars, equipment, and expensive business lunches completely out of proportion to your needs can eat into the capital and leave your small business with very limited working capital. Hence proper and wise handling of funds especially at the early stages can make all the difference between success and failure.
Secure the services of a consultant to help you plan
Conclusion: Failure to avoid the above-mentioned mistakes for one reason or the other can be detrimental to the progress and success of your small business.
Securing the services of a consultant to help you plan out your small business before starting will be a wise move to ensure success.