While there are many reasons why small businesses fail, one of the most common mistakes is made right at the start – when choosing a business idea.
While there are many reasons why small businesses fail, one of the most common mistakes is made right at the start – when choosing a business idea.
In many cases of failure, the reason is simply making the wrong choice. To help you avoid this mistake, here are the four main reasons that lead to wrong choices.
First, not identifying the market need. Success is easier if you do what you love. However, a passion for a particular activity or product is not enough to start a business. You need to consider the market potential, the level of competition, the resources required, and the uniqueness of the idea.
More importantly, you need to consider the potential market demand for your proposed product. If you just turn your hobby into a business without first finding out if there is a market demand, the possibility of failure is always certain.
Determining the potential demand and size of the market for your product is the first factor in choosing a business activity.
Second, doing business without a proper plan. You need to plan each specific step of operation, each small decision made. A written business plan always reflects a scientific and reasonable business strategy. This ensures that business activities always follow the set direction and goals.
Third, not learning and not seeking help. It is very unfortunate that most people who want to start a business do not consult others about their business ideas. The reason is either because they are too confident, afraid that others will steal their ideas, or simply because they think that others are not helpful. Whatever the reason, this thinking is very short-sighted.
Although not all advice is valuable or worth considering, in general, the opinions of many people will help you have a broader and more comprehensive view so that you can make more accurate assessments in choosing products and business orientation.
Fourth, try to start a business with very little money. You may have a burning desire to start a business, but do you have enough strength to sustain the business? Are the costs accurately estimated and within your capabilities? Have you considered the costs for production support and marketing?
If you don't have enough cash to support your business, the risk of failure is extremely high.
