1. An overview

most businesses fail in their first few years. Twenty percent of new companies fail in their first year, and fifty percent fail in their first three years.
You shouldn't be scared off by these numbers, but they should help you understand some of the problems business owners face when they first start. Your new business can do very well if you work hard at it and know what the problems are.

2. Poor or not enough research
it’s important to do research and plan to make sure that your business idea will work and that your prices are fair in your market and give you a good return.

Not enough in-depth market research

It's simple to get excited about a business idea and start a company without first making sure it will work. You can make strong, accurate predictions if you use accurate market research data to learn about your market.

People who buy from you should think about what they want and test those ideas with market research. You can use feedback to improve the services or goods you're making.

 

The ProMunim of India Apps is free and can help you find market data and statistics that you need to know about your market.

Not telling anyone about your business ideas

If you tell people you trust about your business ideas, they will be able to give you honest feedback. Write down any good ideas that come up during thinking. Then, use them to figure out how to move your business forward.

Asking potential buyers what they think about plans or prototypes can help you figure out if your product solves a problem or gives them something new that they would want to buy. If people give you good feedback, it should help you make a decision and could even help you get investing 

Money. But negative feedback gives you a chance to rethink your plans, which could help you spend your time and money on goods that will make you more money.

A non-disclosure agreement, which is also called a confidentiality agreement, could help you keep your thoughts secret. This is a formal agreement between you and someone else not to share information you shared for a certain reason.

3. Bad planning for money

 

Big problems can happen when people don't have enough money, don't plan for what might go wrong, or don't want to get professional help.

 

Not enough money

Having enough cash is important for your business to stay alive and grow, and it's also a good way to tell how healthy your business is. Making a business plan is important if you want to get the right kind and amount of funds. A business plan can help you structure the financial side of your business and can be changed as the business grows. It can also help you keep your goals realistic for what the business can do.

 

What if something goes wrong
Interest rate hikes, transportation strikes, and political unrest are all outside of your control and could affect your business and cash flow. Your business can stay open even when there aren't any sales or gains, but it can't stay open without cash. To make sure you can keep trading even when things are tough, you should save money.

A refusal to get professional help
If you have money problems, not getting skilled help will make them worse. You can make sure you borrow and handle your money most cost-effectively by talking to a Business Financial Planner, Virtual CFO, Accountant, or Financial Adviser.

4. Having too high of goals
It's important to be honest about how well your business will do. It's easy to make too-hopeful predictions when a business is just getting started, but making predictions that are too optimistic can have bad results.

Too rosy predictions about the size of the market
when starting, a common mistake is making wrong assumptions about the size of the market. You can quickly run out of cash if you hire too many people, buy too many tools, or spend too much on your business space. You can avoid this by making good predictions about your cash flow and pay.
Bad market research is often the cause of wrong predictions, so it is very important to do your study right. ProMunim of India Apps is free and can help you find market data and statistics that you need to know about your market.

Putting more emphasis on sales number or size than profit

 

a common mistake for new businesses is to focus on making more money instead of making more sales.
Over-trading can happen when a new business takes on more orders than its working capital or net current assets can handle. This can happen when the business is growing quickly. There could be major consequences for this.
Changing things up too soon
Diversifying too quickly can make your business more exposed when it's just starting. You may want to get into a new market or area of the world.
Not planning well
if you don't plan well, you'll probably make more business mistakes and have a harder time reaching your goals.
Making a reasonable business plan is very important. You can get outside funds, avoid problems, and see how well your business is doing with the help of a business plan.
Writing a marketing plan will also help you decide who your target customers are and what your marketing goals are. It will also help you set goals to reach these goals.

5. Not paying attention to the competition
it’s easy to forget to keep an eye on the competition when you're busy with the early stages of your business. That being said, you need to be ready to deal with competitors and new developments in your business.
You can see what competition or threats there are to your business in the market if you keep an eye on your competitors.
You're not just up against another business that could steal your money. It could be new services or goods that are being made that you can buy or license before anyone else does.

When looking for similar products or services online,
•  searching on the web for similar products or services
• advertising
• press reports
• exhibitions and trade fairs
• approaches reported by your customers
• flyers and marketing literature that have been sent to you
• planning applications and building work in progress
Add anything that will help to your marketing plan.

6. Weak rules over suppliers and customers
Setting up bad credit terms and not being careful enough when picking suppliers are mistakes that many new businesses make.
Setting up bad relationships with suppliers
because you depend on your providers to give you the goods and services your business needs to run, picking the right one can be very important to its success. Getting the best deals can have a big impact on how much money your business makes.
Setting up plans for people with bad credit
when working with a possible new customer, it can be tempting to give them credit without 

checking them out first. However, this can put your business at risk of not getting paid on time or at all. Some people may not be able to pay their bills or the bank on time. They might then take back their money or goods, which would put your business at risk.
To make sure your plan for getting customers to pay works, you might: 
• Check the credit of both new and old customers 
• Look at bank references, trade references, and online credit ratings from a credit-reference service
• Make sure your buyer knows your credit terms (for example, they must pay within 30 days), and make sure that your debtors have longer payment terms than the ones you give your customers.
•Offer discounts to customers who pay early to get them to pay faster; 
•look into legally binding ways to get people to pay quickly;

7. Getting the wrong people hired
Your new business will do well or not depending on how good the people you hire are.
The way you hire people will depend on the needs of your business, such as whether the work is ongoing, how long it will last, and how many hours are available.
Thinking about all the different ways you can hire people might be helpful.

8. Not keeping track of stock and assets well
You might be tying up your capital for no reason if you don't keep track of your stock well or spend too much on fixed assets.
Bad management of stock
You will have the right amount of stock in the right place at the right time if you manage your order well. It keeps capital from getting stuck for no reason and keeps production going when there are issues in the supply chain.
Set up ways to keep track of how much stuff you have and how much it's worth. Taking charge will free up cash and make sure you have the right amount of stock on hand.
Controlling your stock can be done in several different ways.
•You can re-order when the stock drops below a certain level, 
•check stock often, 
•use just-in-time (JIT) shipping to keep from having too much stock on hand.
Putting too much money into fixed assets
It can be a problem to spend too much on fixed assets like office chairs or computers. When you buy fixed assets outright, you become the owner right away, but you have to pay the full price upfront, which takes money away.
Some alternatives are: 
• Leasing assets lets you pay for them over a set amount of time in regular installments, which frees up more cash. There's a chance you can improve your gear without buying brand-new ones.
• Hire purchase: by the end of the payment plan, you own the item. When you lease, this is not the case.
• Used office furniture, tools, and other things can be bought.
Start-up: The Basics is a book that can help you learn more about the process.