Why are some start-up businesses successful while others fail? The basis for survival is creating a detailed business plan. If you are just starting your business, avoid some mistakes which were described on Allbusiness.com.
1) Too rapid growth
The growth of a business is, of course, desirable but excessive effort in expanding your company may not be worth it as the rapid growth of your company will be expensive. So it is better to set realistic goals which will take account of your financial and time options.
2) Inability to track finances
Companies which fail have often taken on too much debt. Keep records of your income and expenditure and borrow money only if necessary.
3) Overspending
Many starting entrepreneurs overdraw on their start-up capital before the cash flow is positive. You should be moderate at the beginning of your business and start to spend money only when you know you will get it back.
4) Lack of reserve capital
Be prepared for a sudden growth in the price of materials or labour costs. Have reserves available which will help you to bridge any such difficult periods.
5) Poor employees
You can create an excellent business plan but incompetent employees may destroy everything. So choose staff very carefully and provide them with important information and training. Read more about recruitment and employee training on HR News.
6) Ineffective marketing
Customers cannot do business with you if they do not know you exist. So invest in advertising. Present yourself through on-line marketing or social sites.
7) Underestimating the competition
The loyalty of your customers will not just happen: you have to earn it. Watch your competition and try to stay one step ahead of them.
More articles on this topic are available in our entrepreneurship section.
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