By Kristin Marquet, is the founder and creative director of Creative Development Agency.
Launching a new business can be one of the most fulfilling journeys a person can ever undertake. On the other hand, a failed startup can be nothing short of devastating to an owner’s psyche. If you decide to start your own business, you can save yourself a lot of frustration and angst by learning a few simple lessons from those who have already had their own successes and failures. Here are the top five mistakes you can avoid when launching your business.
Not conducting effective market research.
Too many small business owners or startups overestimate how much demand there will be for their product or service. Even though you may love it, not everyone is going to like olive-flavored ice cream. How large is your potential market? Who are your competitors and do they have similar products or services? What part of their business model can you improve upon? Ask your friends and family for their opinions, run surveys and conduct focus group meetings to generate some authentic opinions on how well-received your product or service will be.
Not having anything unique or different about your product or service.
If your brand is similar to everyone else's out there, why should a consumer buy from you? Better quality? Customer service? Price? Value? Delivery? Branding? Whatever point of differentiation you choose, it needs to be conveyed in all of your messaging and communications. If you don't have anything unique to offer, then your new business is going to have a very difficult time standing out in a crowded marketplace.
Underestimating how much time and money you need.
Whether you're launching a blog, a clothing line or opening an online store, you're going to need ample time, energy and resources before your business becomes self-sufficient. Before you launch, make sure to create a business plan with reasonable financial goals. Be sure to include your living expenses as costs, since there's a good chance you won't have a salary up to a year or more. It's always better to overestimate your expenses so you don't end up coming up short of cash; or worse yet, filing for bankruptcy.
Focusing too much on small or insignificant minutiae.
It's so easy to get caught up in the details of your website, logo and business cards that you lose track of the bigger picture -- like meeting your sales targets! To make sure you don't waste valuable time, put together a plan of attack outlining how you plan to launch and grow your business on a day-to-day and week-to-week basis.
Setting your prices too low can impact profitability in the early stages of your business.
Make sure you're selling at the price you need to be successful. Discounting your products or services in the beginning to build a customer base is fine, but you have to make sure that your pricing will not inhibit your company’s ability to survive and grow as well. Otherwise, there's a pretty good chance you’ll be costing yourself operating revenue in the long term.
Making mistakes when launching a new business is inevitable. However, the entrepreneurs who learn from those mistakes and don't make them again are the ones who are most successful.
Kristin Marquet is the founder and creative director of Creative Development Agency, a PR firm in New York City.