Starting a business is no joke. You need a solid idea, a detailed execution plan, and enough capital to launch. Even when everything’s in order, there are significant risks to overcome. Statistics show that over 30% of new businesses fail within two years. But the endgame is worth it. You get to be your own boss, create a legacy, and make that sweet Cadillac money. If your New Year’s resolution is to launch your startup, you need to be in the best position for success. You can do this through research, like taking a few minutes to learn about common, new business pitfalls in this post. Due diligence now can save you headaches later.
3 Common New Business Pitfalls
Do you remember Pitfall?
In the 1982 Atari game, you control Pitfall Harry as he avoids obstacles and collects treasure. In a way, your startup is like the classic Atari game. The good news is that you don’t need to swing over crocodile lakes to avoid yours. The bad news is that startup pitfalls aren’t as easy to spot as pixel reptiles in a lake.
On second thought, maybe you would rather take your chances with the crocodiles.
Below are three areas where other startups failed:
- Not Conducting Market Research
- Failure to Understand Audience Needs
- Pushing Marketing Aside
Thankfully, each can be overcome with some brainpower to give your new business the best chance at success.
New Business Pitfall #1: Not Conducting Market Research
Your startup solves a problem. It may even solve multiple problems for multiple people.
However, you need to conduct research to find your niche and understand if this niche is sustainable. This doesn’t mean asking friends and family for their opinion. It also doesn’t mean trusting that you have a good idea on intuition alone. You can have something incredibly useful, but you need enough people to commit and buy it. In more than one tale of failed startups, owners express regret at not performing enough market research for their product or service.
With market research, you can:
- Identify the best audience to target
- Understand how your product or service provides value to them
- Develop a plan for how you’ll market to them
Through research, you may even learn of better opportunities and find you business at an early enough stage to pivot to the market’s demands.
Pitfall #2: Failure to Understand Audience Needs
You’ve done your research and identified your audience.
Done and done, right?
Not so fast. You have an audience, but do you know them on a superficial level or a genuine one?
- Did you sit down and talk with individuals in your niche about their struggles?
- Did you message them online or research through forums and online surveys?
- Do you know how you’ll market to them when you launch this year?
Entrepreneurs who think they know their audience may come to find through trial and error that they don’t know their audience so well after all. In fact, this is one of the reasons the lean startup methodology exists. A lean startup seeks to understand audience desires first in order to streamline the development of products and services. It’s all about cutting down on wasted time and development resources.
Some additional food for thought: don’t go after too many audiences too fast. Going after a large and diverse audience can be tempting, especially if you’re a tech startup, but you’re at risk of losing your competitive edge and resources too early if you try to be everything for everyone immediately.
If you can’t name your audience clearly, sit down and re-evaluate the benefits of what you’re offering. Who is struggling at this moment without your startup? How does your product or service make their life easier?
Focus on providing a valuable product or service for your niche. Growth happens in time.
Pitfall #3: Pushing Marketing Aside
When push comes to shove between your product and marketing, it’s tempting to skimp on marketing to get the product perfect. However, the need for the perfect product or service can quickly dry up your capital and leave you without customers.
If “just one more feature” is your mantra, this new business pitfall is for you.
Everything doesn’t need to be perfect before launch. In fact, launching a minimal viable product that you’re not 100% happy with can help you understand what your customers want. This way, you don’t spend time and resources on features you think they want.
You also need to understand where you stand. You’re a new player in town. No one knows who you are or what you can do for them. You need to get your name out there. If all your marketing budget is spent, you can’t do that. When developing your marketing strategy, factor in how you’ll reach your target audience and calculate the expense. Whether it’s handing out business cards, advertising on Facebook, or mailing flyers, you need to reach your target audience somehow.
Marketing helps you engage your audience, so you can make sales. More sales means you can repay your business loans, eat something other than ramen every day, and pay your bills.
- Direct Mail Marketing: Place your business in the hands of your customers with direct mail flyers, postcards, and more. Introduce who you are and what you do. Consider running a grand opening special or introductory price. Focus on the benefits you provide.
- Digital Marketing: Online advertising through Facebook, Google, and other social media platforms can introduce you to your target audience and help you attract them over time when they’re in different stages of the Buyer’s Journey. Platforms like Facebook also give you the opportunity to create a brand identity.
- Storefront Marketing: Dress up your shop with vinyl door logos, large window displays, sales posters, and signs. Make your business noticeable, so anyone driving or walking by knows someone new is in town and open for business.
- Vehicle Marketing: For startups that provide home or on-site business services, vehicle advertising is a great way to inform the public about your business. Include a large number or contact information so drivers can remember how to reach you.
- Trade Show Marketing: Depending on your audience, trade shows, and conventions might be an opportune place to attract attention. A word of caution. Don’t go too flashy too early. You don’t need to spend mad money on swag for your startup unless this is a genuine part of your research-backed marketing plan.
Tip: Just as you don’t want to over-invest in your product or service, it’s important to invest in marketing that makes sense for your business at this early stage. The more flashy and fun marketing can be done later if it’s not an essential part of your strategy. It’s exciting to have your logo on custom tees and swag but make sure it’s justified. Otherwise, save up so you can get there in time.
Introduce Your New Business to the World
Tell us about your New Year’s startup plans and how you’re going to conquer new business pitfalls to make yours a success! Share accomplishments or setbacks you’ve had with your current business or a past one. While it’s not possible to anticipate every pitfall a new business will face, it helps to think ahead and ensure you’ve got the basics down so your startup can succeed.
Best of luck to you from the team at RiZen Metrics.
If you need assistance with your new business marketing in the new year, we’re happy to help!