Starting a new business is never an easy task. The growing competition and constant strain of keeping up with the tech developments changing every industry are making small business owners spend more and more time at the drawing board. The planning stage of creating a new company is very important because that’s where the management can prevent most future problems from happening in the first place.
As it’s often the case in business, the biggest mistakes in planning come from the things you don’t do, rather than the wrong moves you make.
Failing to do market research
The key to creating a useful business plan is to understand the market you’re trying to get into. It should start with a focus on a clearly defined problem, a business is facing (for instance, trying to expand to a younger demographic). The next step is collecting the relevant data based on the portion of the market the company is interested in. This should provide you with an actionable report on how the market will respond to your company.
The main benefit of thoroughly investigating a market is that it allows the company to identify an opportunity, usually in a form of a need that the key demographic has and that isn’t being met by other businesses. It makes all future marketing efforts easier since it’s based on clear lines of communication between a business and its customers.
Not having a business plan
A business plan is a blueprint that outlines all of the startup business concerns and how you plan to handle them in the course of the first couple of years. It should start with broad strokes, such as the purpose and the theme of the company.
It should also outline the budget needed for reaching the preferred goals, as well as those goals put in numbers. A plan should specify the place the company wants to hold within the market and how fast it can reach it. In the end, the lack of a business plan usually means that products and services a business offers aren’t defined and clearly presented. Furthermore, a plan covers the financial future of the new business and the infrastructure it’s going to be built on. Not having such a plan can scare off investors or potential business partners.
Not analysing your competitors
An analysis of your competitors gives you an advantage because it lets you know where your competitors are lacking and how you can step up and attract their customers. Start by finding out who they are and what their business offers both to its customers and its employees.
Try to map out their strengths and weaknesses. That will let you know how your own company can improve and where you outperform the competitors. This analysis is sometimes a matter of investigating public information about the businesses in your industry and sometimes it can require inside info as well.
Not defining a niche market
It’s perfectly fine if a business wants to grab as big a portion of a market as they can. However, small businesses can’t accomplish such a goal at all and even the large ones would struggle with defining their product in this context. The best way to go is to define and find a niche market that you can tackle.
Choosing a niche market early on allows the company to use its resources in a more effective and productive way. With a well-chosen niche, your new business can have a small enough market to remain dominant, but still large enough to make a profit.
Not planning your marketing efforts
It’s essential to advertise a company with a clearly defined plan. That way you can focus on the key demographic and provide marketing content that’s suited to the clients and customers you want to attract.
At the same time, having a detailed marketing plan makes the marketing efforts less expensive, since no funds and no work hours are wasted on trying to find the message.
Most businesses fail due to avoidable mistakes. Planning the production, marketing efforts and creating a team in advance can fix most of these mistakes and give a company a fighting chance.