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Going it alone professionally is one of the most terrifying decisions you will ever make, but it can also be one of the most life-affirming. Taking that atom of an idea and turning it into money-making reality takes courage. You will wave goodbye to your office colleagues, your promotion prospects, and your regular wage in return for professional autonomy and a few months of uncertainty. It is these uncertain months that can make your regret taking the plunge. However, venturing into self-employed waters can reap you many rewards. You dictate your own hours, you decide the work you take on, and you are the master of your financial and professional destiny. As a newbie entrepreneur, there are many pitfalls that you need to try and avoid. Take a look at this guide to help you navigate the choppy entrepreneurial waters.
Pitfall 1: Funding Dries Up
With a solid business plan, you should be aware of the funding you require to get your venture off the ground. If you continually need top-ups to your cash flow, your investors will likely become annoyed. By asking for more money at irregular intervals, you will appear desperate and weak. Financially you need to be secure. Without a long term view of your finances, you run the risk of your investors pulling out of business dealings. A bank could withdraw a loan or claim against your business if you begin defaulting on payments. This all sounds very scary, but you shouldn’t even head into this territory if you have done your sums correctly.
This is why a business plan is so important. Don’t just print a generic template off the Internet to fill it out and stick it in a filing cabinet. Your business plan should be bespoke and be well-thumbed. It’s a working document that you need to be referring to all the time to help you construct your business vision, your financial forecasting and your digital strategy.
Pitfall 2: Marketing Fails
A business can only succeed if its target market knows of its existence. You may have the best business idea for a generation, but if no one knows about it then what is the point? This is where your online marketing strategy comes into play. You need to ensure that you have social media feeds to exploit your business. Show off your wares on Instagram, put links to your services on Twitter and utilize a business page on Facebook. By driving traffic to your website via social media, you have a greater chance of converting hits into sales.
Being online is crucial to every business in the twenty-first century. Add to this that many first contacts are made through your ‘email us’ page, it is vital that you investigate calculating the cost of website downtime. Even with only one per cent downtime, this could be three days a year of potential sales lost. It’s crucial that your website host and your server bandwidth is adequate for your traffic. Make sure any host you enter into a contract with is reliable and has the knowledge to solve issues as and when they arise.
Pitfall 3: No Customers
In this coronavirus pandemic, the lack of customers can be stark. From a bumper trading year, customers have fallen away sharply. When a crisis such as this hits, it can be hard to anticipate and mitigate the impact. The best thing to do is to try and ride it out with as little financial deficit as possible. Think about how you can conserve your money by streamlining your processes. This may mean foregoing the office space, especially if all of your staff are working from home. If this is working successfully, consider remote working as a money-saving option for the future.
If you are keen to attract your target market back, you may need to consider some loss-leading discounts to boost consumer confidence. It won’t just be your business employing this tactic. Retailers and businesses, large and small, need to try every trick in the book to get people to part with their cash once again. People are nervous about what the future holds. While they may have been eager to spend money on fine dining, going out, and luxuries previously, now they are more concerned about the food on their table, paying the bills and their own employment. Be patient, and try to rely on those initial sales. Capitalize on them with excellent feedback, your sound reputation and your exceptional customer experience.
Entrepreneurship can be a difficult road down which to travel, even more so now the coronavirus crisis has hit. To maximize the success chances of your business, follow this guide and avoid the pitfalls of entrepreneurship.