Incubating a new business and steering it to success can be a daunting task at times. Running a startup demands good planning and organizational skills.
In the early stages, the business is still delicate and as such the proprietor should be keen to avoid mistakes that could prove costly. Kenyans.co.ke takes a look at some of the mistakes that can lead to the collapse of a startup.
1. Poor Location
Selecting an ideal location is instrumental for the success of your new business. The location of a business determines its success or failure chances. Thus, the proprietor should consider whether a location suits the type of business they are setting up.
This is arrived at through research and planning to effectively evaluate the available options. Some of the key considerations in choosing a location are safety, cost of acquiring business space, and proximity to the clientele
2. Poor Market Analysis
Market analysis is also an important factor to consider when establishing a new business. The proprietor should be keen to analyze the target area to determine, among others things, the purchasing behaviors of the market and the possibility of the product being accepted.
The market analysis could also help in establishing the existence of a business gap.
The information gathered from this research becomes the foundation upon which the proprietor builds their business.
3. Huge Expenditure
For a start-up, a huge wage bill is likely to choke the operations of the business, especially if the business takes longer to gain momentum. The expenditure could be a result of a high wage bill due to many employees or high rent.
4. Lack of management skills
Management is key in starting and running a business. It entails the art of harnessing and controlling the means to achieve the set goals.
Poor management skills could easily lead to the misappropriation of resources such as time, capital, and information.
Allocation of resources should be done in a judicious way to avoid wastage which would in turn hinder the take-off of the business.
5. Lack of clear goals
Goals help dictate the direction of a business. Business objectives serve as motivation for both the owner and employees.
In setting goals, the business owner should ensure that they are clear, well defined, and achievable. This helps to steer the business towards success and keep it afloat.
