Dear M & M: What are some common overlooked areas or problems new business owners’ fail to look into or fail to do before they open that can lead them to business failure? – Bill
Just as no two businesses are alike no two business owners are the same. Although this list doesn’t have every possible thing covered market conditions, owner’s expertise, management experience and disrupting technologies can put the best idea or business out of business under the right or wrong conditions. Here is a list of some pitfalls to avoid. At the top of the list, the best marketing plan would be to sell customers something they want, rather than trying to cram down their throats something they don’t want. Bottom line; make sure you are selling something people actually want.
Another important step and an important part in any new business venture is to do adequate research in defining target markets: Where do my customers live, who are my potential customers, how many are there, how frequently will they make a purchase, how much do they spend, why would they buy from me and not the other person selling a similar product? A third area one would want to avoid is; failure to underestimate competition and identifying your competitive advantage.
It is important to explore to enable you to exploit opportunities available. That is why businesses start. Solving a problem, doing something better, offering something others aren’t are ways to take advantage of opportunities your competitors are not doing in any particular market. A fourth critical area to consider as a new business owner is sometimes called the “three most important things” to consider when opening any new business location, location, location.
To cause pain by paying too much for a high traffic location when you are a destination driven business or not paying enough to be located in a high traffic location when you need that impulse sale to survive. If your business is dependent on traffic and you make the decision to locate in an out of the way remote location to save on monthly rent, you might find yourself in a situation where you will be spending way more money trying to drive traffic to a spot people will never come.
All this can be mitigated if you pay attention to picking your location. Finally opening a business checking account, setting up a bookkeeping system, monitoring financial reports and filing sales tax, payroll and other federal and state taxes in a timely manner will all go a long way in helping you sustain your business. According to the SBA, “Seven out of 10 new employer firms survive at least 2 years, half at least 5 years, a third at least 10 years, and a quarter stay in business 15 years or more.”
Census data report that “69 percent of new employer establishments born to new firms in 2000 survived at least 2 years, and 51 percent survived 5 or more years. Survival rates were similar across states and major industries.” The Bureau of Labor Statistics data on establishment age show that “49 percent of establishments survive 5 years or more; 34 percent survive 10 years or more; and 26 percent survive 15 years or more.”
To ask your questions: Call the Small Business Development Center(SBDC) at Cochise College (520)-515-5478 or email email@example.com or contact the Sierra Vista Economic Development Foundation(EDF) at 520-458-6948 or email firstname.lastname@example.org