Launching a new business or a new product is hard work. According to business statistics, approximately one-third to 20% of companies fail within two years.
The same principle applies to new products or services, depending on the industry sector and location. However, the survival rate remains at risk for another three years.
Most small businesses fail during their first five years of existence. At the same time, there are currently over 150 grants for small UK businesses to help entrepreneurs fund their dreams. As such, the most critical question to ask is: What drives the failure of small British businesses?
While financial considerations do play a significant role, they are rarely a major cause of worry for entrepreneurs. Indeed, with funding opportunities and financial advising available in most towns, it seems that capital is not an obstacle in the launch of a business idea.
On the other hand, poor planning and management can affect the survival of the business. Here are the 7 deadly sins that drive new businesses to the ground:
#1. Your brainstorming is a flawed
At the heart of a business, there is an idea that is both marketable and in demand. Finding the right business idea is not something that happens by sheer luck. It’s the result of dedicated brainstorming to gather data and create new processes. The brainstorming process, however, can slow down business growth.
Brainstorming is a difficult skill to master. When you agree to generate ideas and solutions, the process needs to focus on the generation phase. It’s all about coming up with as many ideas as possible.
As soon as criticism becomes part of the brainstorming session, you dramatically reduce your ability to come up with new ideas. Ideas should not be weighed and compared at this stage.
If members of the group are free to judge ideas, the behaviour affects not only the overall creativity but also the desire to share new thoughts. Nobody wants to be mocked and criticised. Brainstorming should, therefore, be a safe space.
It is only once all the ideas have been recorded that they can categorise, evaluated, and analysed. Failure to design a space where ideas can be stored unedited decreases creativity quality and participation. When people are too afraid to share, your business is at risk of growing on flimsy grounds.
#2. You don’t have a growth hacking strategy
Creating your new business or your new product is only the beginning of the entrepreneurial adventure. Without a marketing strategy, you can reach your audience. In 2020, there can be no business launch without the support of a digital marketing agency that can help your company to get noticed by potential buyers.
At its core, a business needs to generate an income to survive. Growth-focused strategies that can boost sales and revenues rapidly are crucial to your survival. Many businesses fail to understand the importance of capital generation.
You can’t build a presence by developing marketing activities that don’t promote sales. As much as brand reputation and awareness matter, branding doesn’t guarantee survival. Some of the most recognisable companies have been forced to shut down because they couldn’t make ends meet. In short, growth beats brand any day.
#3. You get caught up by the name
What should you call your business?
The choice of your business name is essential. The right name can make your company. But delaying launch to find the best possible name is a costly miscalculation. If you are stuck for a name, it’s a good idea to use an online name generator to gather some creative input and find the way forward.
A good name matters. But when finding a good name prevents you from working, you need to stop aiming for perfection and find something that works for your niche.
#4. You don’t test
Of course, people will love your business idea. How could they not.? You love it!
To quote Marc Andreessen, entrepreneur and successful investor who co-founded Netscape and a Silicon Valley venture capital, “the only thing that matters is getting to product/market fit.”
Adjusting your idea to fit the market is all about testing your theory. Is it going to work? Who is going to buy it? There is no secret. Without adequate market research and experimentation, you can’t get the customer validation you need for growth.
#5. You make it too personal
Everyone dreams of finding THE business idea that will drive sales. A lot of entrepreneurs find it hard to evaluate and transform their ideas, even after gaining market insights. There is no room for ego when it comes down to building a successful business.
If the market rejects your idea, you need to be able to go back to the drawing board and address the necessary changes. Defending a bad idea against the market simply because it is yours is only going to slow you down.
#6. You jump on all the bandwagons
Trends sell. Or do they really? New tech trends appear every day on the market. The cycle of innovation is a continuous process, which can affect your business growth.
The race for innovative trends can act as a blindfold for businesses, keeping them away from their customers for the sake of delivering the newest product.
Innovation is built on timing. If you jump on the trendy bandwagons too early, you are not appealing to anybody. If you’re too late, your voice is getting lost in the existing market.
#7. You don’t make it personal enough
Getting too personal with your ideas can prevent positive contributions to your business. But failing to build a personal business for fear of ego can be just as harmful. Your audience needs to engage with the people behind the brand.
They don’t just want to buy a product. They want to buy a story, yours. Business launch, nowadays, needs to link back to the founder and the team. By making your story a brick in the wall of your business, you create an engaging and relatable brand.
Vlogging and behind the scenes tours are some of the most popular personal insights for companies.
Launching a new business or a new product is a challenge of every day. While many companies fail to project an engaging presence onto the market, experts have identified common mistakes behind their failures.
The seven sins of business launch may not provide a definite path to success, but they reveal which costly mistakes to avoid on the way.
