by Mary Jane, Demand Media
Running a successful business is not only about offering a product or service that is in high demand, it is also about adjusting the company’s actions to a budget and the ever-changing industry. Companies, however, often make common mistakes that affect the success and worth of the business. Learning what those mistakes are and addressing them in your business puts you on the right path to running a thriving company.
Not Having a Business Plan
One common mistake is the failure to create a business plan before a business launches. A solid and detailed plan outline services and products, explain the budget with expenses and predicted sales figures and include a detailed examination of the risk associated with running the business. The business plan prepares you in case any risk factors become relevant when starting or running the company.
Failing to Define Market and Target Audience
Don’t assume that your product or service is for everyone. Not having a target audience in a focused market makes it hard to reach those people who want to purchase your products or services. Define your target market and audience by making consumer profiles. Determine whether you are selling to men, women or both and provide an age range, or break it down by interests and professions, for example.
Setting Expectations Too High
Expecting too much too soon is another mistake business owners make. Success does not come overnight, and sometimes it may take years to reach the level of business you find to be average. The first six months to a year often shows negative numbers when comparing the total expenses to the total income. So, expecting to earn hundreds of thousands of dollars in the first year may not be a realistic goal to achieve.
Spending Too Much or Too Little
While some spend too much on starting and operating the business, others spend very little, which prevents potential growth for the business. Find an average spending habit that suits your budget. Do not be foolish and purchase property and computer equipment for thousands of dollars as a luxury, but do not hold back with a marketing campaign if it benefits the business.
Avoiding Marketing Plans
Some companies expect customers to find them and purchase their products or services on impulse. Avoiding marketing is a common flaw that often results in slow growth or a decrease in sales. Advertising includes items such as banners, posters, newspaper ads and having a well-developed website. Use creative advertising methods to stand out from competitors.
Success does not necessarily occur because you have several locations or hundreds of employees. Expansion does not necessarily equal success, but some business owners tend to expand too soon without having the funds for it. Growth is costly, so opening several stores without knowing the earning potential may leave you with more debt than when you started.
Holding on for Too Long
Some business owners are passionate about their products or services and may be naive when it comes to letting go of a failing business. If the business is continuously losing money each month, it is time to make some changes to suit the market and boost sales. One mistake business owners make is being too caught up in the idea or in the company’s products, rather than focusing on the target market and the audience’s direct needs.