Many entrepreneurs tend to make some common mistakes when it comes to their new
businesses. One major mistake is excessive spending, which usually occurs after
they are able to successfully raise
capital. Every experienced entrepreneur understands that in order to maintain
a sustainable business network, they need to spend modestly, since cumulative startup
costs can be quite expensive. Renting an office space, as opposed to buying property,
is one way in which a new business owner can establish low recurring costs. Depending
on their business, they may also consider leasing a kiosk or an operating cart,
which could further lower overall expenditures. This will also decrease the total
amount of seed funding that
a business owner requires when starting a company.
Another important decision that an
entrepreneur may face is where their prospective
business will be situated, since choosing the wrong location may lead to company
failure. The rental rate at a particular location may be ideal; however, it may
be located in an area that does not effectively draw people to buy their products.
Before finalizing on the location for a new business, the entrepreneur needs to
physically visit different areas to see the existing traffic patterns. If their
prospective company is situated in a popular location, then they can certainly generate
substantial consumer traffic to their business as opposed to an unfamiliar area.
The best suitable location for a
small business will depend highly on the target
audience in order to ensure that existing and prospective customers will be effectively
served.
In addition to the importance of location, the
new business owner needs to check
with the property managers regarding issues such as costs, cash flow, staffing,
and lease length. Furthermore, if an entrepreneur decides to set up a business in
a public place, such as side-walk or near the park, he/she needs to contact the
city or county to obtain necessary permits and licensures. Overall, many of these
common mistakes are due to the lack of preparation and market research. Whether
a business owner obtains business funding
or not, excessive spending, unfavorable positioning, or even poor target marketing
can eventually lead to a companyâs failure.