Top 5 Mistakes When Starting a Business in 2021
Chris Michael Harris, Entrepreneur
In today’s episode, let’s talk about the top five things to avoid when starting your new business. These are the usual mistakes I’ve seen back from years and even into the future and you can use them in any market. Knowing these mistakes will help you with strategizing what must be done in building your business.
1. Fad Markets
It’s nothing like a fad market, getting into something where it’s this explosion for a couple of years, and then it just kind of dwindles away. The problem is that if you’re positioned to ride that wave, and you got lucky, but at the end of the day, once you built the infrastructure, and you’ve got a company, you’ve got employees and you make all the investment, you need to really get up and running.
More than likely that wave has already passed. And now you’ve got to figure out okay, what do we do now. And if you are starting out, it’s probably not worth pursuing.
2. Dying Market
If you’re trying to launch something like a print ad or something that’s just an antiquated modality, you’re probably going to find that it’s on the tail end of a dying market. When thinking of a business to start, check out what’s trending and what product sells the most in this specific market.
3. Unproven Market
So this is a huge mistake that I see people make when they think, there was no competition in that market. Now the problem is, even if you do have this glamorous brand new idea, the problem is gonna be traction. So it may be difficult, even if you are the very first person to think of this grandiose idea that you have for a business, it might be very hard for you to get penetration for a variety of different reasons, it also may be hard for you to secure funding if your business requires funding.
4. Low Margin Business
Growth requires cash in a low margin business and sacrifice had to be made. So for low margin, you just have to understand it is what it is if it’s something you’re convicted about. Just understand that that’s what you’re getting into and know that it’s going to be a little bit of a tougher challenge, you’re going to make sure that you do have other ways to subsidize your income outside of the business, because it may take a very long time for you to be able to pay yourself.
5. Low scalability business
Technology is easy to scale, That’s why people love technology concepts, why investors flock to them, and it doesn’t require more manpower to do that, just requires online bandwidth and, you know, a bigger server.
For you, it’s going to be great that you can really scale up without all the overhead and sunk costs and investment and manpower and all the things required to run a company unless you’re just truly convicted by what it is you’re trying to accomplish.
Bonus: Business that requires large investment
Your startup business will require a large investment to get started. And one of the bigger challenges is that their idea is great but it will require so much to get off the ground. In today’s day and age, it is harder and harder to get idea stage funding since a lot of people want to see that a business is established.
So if you have a business that requires a large investment to get started, I think you’re gonna find you’re always going to be fighting an uphill battle.
Hope was helpful, see you on the next one!