Common mistakes to avoid when starting a business

Launching a small business may involve some risk, but with an awareness of the most common challenges, you will have the potential to be a great success. Follow our six tips for new business owners:

1. Do market research

Lack of proper market research is one of the key problems for new businesses. Research and planning are vital to ensure that your business idea is viable. Make sure your pricing strategy is competitive and provides an adequate return. Understand your market, identify your target audience, and assess the demand for your product or service.

2. Secure finance

Having sufficient capital is essential for the survival and growth of your business. A well-crafted business plan is key to attracting and securing the funding you need It is also important to have a plan for unexpected costs or problems. Set aside a fund to help you navigate unforeseen challenges.

3. Be realistic

During the start-up phase, it can be easy to make overly optimistic forecasts. Common mistakes include inaccurate forecasting of market size, focusing on sales volume rather than profit and expanding into new markets too quickly. Conduct thorough research to develop realistic business projections and set achievable goals for your business's growth.

4. Choose suppliers carefully and perform customer credit checks

Many new businesses set up unsatisfactory credit arrangements and do not take care when choosing their suppliers. It is important to carry out credit checks on new and existing customers. Similarly, choose reliable suppliers to maintain a steady supply chain.

5. Manage stock control

Overspending on unnecessary stock can harm your cash flow. Implement systems to check stock levels and values accurately. This will help you keep the right amount of inventory and freeing up cash.

6. Hire the right people

Employing relatives and friends may appear an easy solution to staffing issues, but they may not have the right mix of skills that you need. Taking on people will always mean some form of investment for your business and requires careful consideration. Make sure you hire people with the skills and experience your business needs to succeed.