Planning a business takes a great deal of care and attention to detail. It is easy to skip a few steps or ignore something significant if you rush to get your business going. Any one of these omissions could turn your business into a failure before it has even started. Here are 7 significant things ignored when planning a business that can result in failure.
1. Failing to Do a Business Plan
Unless you write a business plan, you will be unable to assess the viability of your new business, let alone whether or not it would be profitable. There are several components of a good business plan, most of which are mentioned below. A good business plan is the foundation of your business blueprint: your justification for starting the business, how it is to be developed and its ultimate objectives.
If you are constructing a piece of furniture, you need a plan to follow. A list of materials and how they are to be put together is crucial. You will likely use this plan to establish whether or not it is cheaper to buy the piece or make it yourself. The same approach applies to planning a business. You need to define a course of events from concept to completion. You need to evaluate your cost and establish whether or not you need financing. If so, you will have to present your business plan to prospective lenders such as your bank.
2. Ignoring Your Financial Planning
Financial planning is a critical aspect of a business plan. Therefore, you must consider the following:
- Raw materials and any employee costs
- Profitable selling prices or fees for goods or services
- Projected income over specified time periods
– and more. Check over your initial business plan and the cost of each step.
Many people who are starting a new business fail to take financial planning seriously until they circumstances force them to do so. Every new business needs a cash flow projection, particularly if you are looking for financing. You will have to assess your income and expenses. Also, you have to be able to present a projected balance sheet. You must prove that your business is worth investing in, and that you can repay any business loan offered.
3. Ignoring Market Research
Before you do anything else, you must make sure there is a market for your product or service. Many businesses fail because people have ignored market research and end up finding that they have no customers or clients to sell to. You can easily avoid this. Simply carry out some market research – this can often be done online. Market research is a critical aspect of planning a business, no matter what your business is offering.
Check out forums and social media. Ask “what if you had…” and look for responses. Check out Amazon for products similar to yours, and then look at their reviews and questions asked by users. This may give you ideas on how to adapt your products to provide solutions to the issues people are having with existing products.
You could use a Facebook Business Page to present an online questionnaire. Design the questions to find out the potential responses to your new product. Never ask for personal details – just questions that can help you analyze the potential market for your product or service. It is absolutely crucial to ensure that your business has a market and that you have people interested in your type of product.
4. Ignoring the Competition
Choosing to ignore the competition when planning a business is a fatal error. If your competitors are selling the same products or services as you, how do you intend to compete with them? If your business plan and financial analysis say you must sell at $20 and your competition is selling the same at $16, who will they end up buying from? You see why ignoring the competition should be avoided at all cost, right?
Another aspect of the competition is the market saturation of your area. Before even considering starting up a business locally, you must check out who else is offering your product or service in your projected geographical area. Find out who those businesses are, what they charge and whether or not there is any possibility of you competing with them at their price level.
Also, keep in mind customers tend to be faithful. If your competition offers a good and reliable service, why should they switch to you – unless you are undercutting them with the same or better service? You have to offer an excellent reason for them to switch to you.
That could be a price advantage, a better product or a more comprehensive service – or even all of these. You could offer better guarantees or warranties, more design or higher specification or some other reason to persuade them to buy from you. Put yourself in the buyer’s shoes: “What would someone have to offer you in order to persuade you to choose another supplier?”
5. Ignoring Online Marketing
Ignoring online marketing when planning a business is a cardinal sin in this electronic age. Many people – in fact, likely most – will look online for what they are seeking. Whether they’re searching for a service or a product, they will check Google Local for businesses that provide them with the desired means.
Many will go straight to Amazon for their product needs! You must get registered on Amazon and get your own Facebook business page. Advertise on Facebook and sell on Amazon. Increasing numbers of people go online to find what they want.
Many people use Amazon and get free delivery in many cases (without paying for Amazon Prime.) They can check out the reviews for their product and make a purchasing decision based on these reviews.
You don’t need to have a website, although that would be beneficial. What will help you is to:
- Get a Facebook page for your business.
- Get your products offered for sale on Amazon.
- Register with other social media such as LinkedIn, Pinterest and Twitter: Tweet new products or updates to your Twitter followers.
- Run a blog – there are free blogging applications available for you to use. You can keep in touch with customers and clients by blogging about fresh news, special deals, and other helpful information.
Never underestimate the power of the internet. You can be sure your competition is using it.
6. Ignoring SEO Techniques in Internet Marketing
If you decide to use a website or blog to promote your business, then you need to understand some basic SEO principles. The focus of Search Engine Optimization (SEO) lies on to the improvement of your website design and ensures that your site’s content is listed on Google as well as other search engines. Keywords are essential, but you should not overuse them. When planning or running a business, you should be able to elaborate about your passion for said business and draw your audience in this way.
SEO is necessary, and Google itself will teach you a lot about it. Check out the Google Webmasters Support site to learn more. It is not difficult to follow, but if you feel you need help with SEO, then include some expenditure on it in your business plan.
Here Are Some SEO Techniques That Should Not Be Ignored:
Use of Keywords
Google will use its LSI (Latent Semantic Indexing) algorithm to establish the theme of your web content. This tool analyzes the vocabulary used on each web page to decide for itself what that page is about.
However, it would help if you never write for search engines. Write for your readers, and Google will decide itself what you are writing about. Excessive use of keywords gets punished, and in many cases, all you need is about 1% keyword density. If you keep using the same keywords repeatedly, you won’t just annoy Google but also your readers.
Social Media Connects
Never ignore the power of social media. If you don’t have a Facebook business page, then get one. Also, make sure you have a Google+ page. Not only does social media connect with an ever-increasing number of potential clients or customers, but they can also connect with themselves.
People talk about what they see and also Retweet or Share specific posts that interest them. Not only can you use social media to connect with people interested in your product or services, but they can share also that information with others and vice versa: have your content go viral and you will receive a massive amount of free advertising.
Not just that, but make sure you have your website links on your posts and tweets. You may then get links passing all around the web – that is impressive SEO!
These are just two SEO techniques that are used to ensure that your web pages are displayed when potential customers are searching for products or services that you can offer. Never ignore SEO – but use it wisely to make better use of what it can offer.
7. Ignoring Financing
Ignoring financing can end your business before it even begins. You must make sure you have enough money to start. If you need to borrow funds, then your business plan must be good enough to persuade banks that you are a reasonable risk. Only ever get financing from banks or recognized business angels or financiers. High-interest short-term loans can result in you losing everything.
That’s why your business plan should be adequately prepared – even if you have to pay to have it done. Financing is crucial, but never borrow more than you need to get started. Check whether you qualify for any “startup” government business loans. There are of course other ways to acquire financing for a new business: Check here for some more ideas.
When planning a business, it is vital to give yourself the best possible chance of success. Your plan should certainly take into account the reasons why some businesses have failed, but it should also consider why many have succeeded. Avoid failure and follow proven success.
The 7 tips discussed in this article should help you avoid the major factors ignored by those who failed, but they should also point you in the right direction for success.