1. Having a poor business plan
Having a strong business plan plays a critical role in determining business success. Your business plan should outline your overall strategy, including the purpose of your business, your target market, competition, marketing and management.
A sufficient business plan should plan out, guide and determine every aspect of your start-up business, which will help to keep you focussed from the beginning and can serve as a reminder to you and your employees of your goals in the future!
So often we work with businesses that have a great idea, but haven’t thought through some of the finer details, or even the complete opposite and have planned so much they’re not able to adapt quickly when things go wrong.
2. Not thinking your business name through
The name you choose for your business says a lot. It’s the first thing people encounter about your brand and has a huge impact on how customers view you. It is important that you consider a name that is unique and unforgettable. Do your research and make sure the business name is available! A simple name can be punchy and effective and if it is easy to spell and pronounce it means your business will be easier to find when customers look for you online. You want to appear at the top of search results so also try to avoid names that are similar to that of other businesses.
If you are looking to grow and expand your business, it is crucial that your name doesn’t stop your business from adding to it’s products. For example, avoid calling your store “Just Handbags” if you plan on stocking shoes or other accessories in the future. Choose a name that embodies your business values and try to sample the potential names with future customers. Market research is an incredibly useful tool that will allow you to get feedback and inspiration from a sample of people from your target market.
3. Poor location
Don’t let cheap premises suck you in. When you are a new business you are not a “Destination Store”, people won’t go out of their way to visit you and see you as a destination. You need to go where the people already are. One of the most important factors in the success of a retail business is location and it can have a detrimental impact on the success of your store. It is essential that you consider competition, accessibility and the area as a whole. Many consumers are favouring locations with cheap or free parking and are travelling to visit out of town retail parks, so make sure your customers have a reason to visit you! Setting up your store in the right location is key and getting it wrong could cost you your business.
4. Not valuing your customers
The customer holds the key to every successful retail operation. Knowing your target market and focusing on that in everything you do, will help to grow your business. Customer service should be your highest priority and rewarding your loyal customers can be very effective in encouraging them to return. A way of doing this is by offering your customers points for every purchase they make, which can be redeemed on purchases in the future. This method will make your customers feel valued and will encourage them to return to you and also boost your sales so it’s a win win. Additionally, it will help to set you apart from your competition!
“If you work just for money, you’ll never make it, but if you love what you’re doing and you always put the customer first, success will be yours.”
5. Failing to choose the right team
Focusing on the employment of your management team is usually the best place to start when hiring for your new business.The success of your company is dependent on having a strong leader and it’s important that the person you choose to run your business is an effective communicator and has the skills to inspire and encourage the whole team. It is also vital that you start off your new business with enthusiastic people who share a passion for your vision. Trust your instincts and avoid employing unreliable or untrustworthy people who lack enthusiasm, which can result in loss of profits and stock loss. Having poor staff members in your team can have an incredibly negative effect on other team members and your customers. Having an effective team can give you more freedom to plan the future of your business and concentrate on the bigger picture.
“Trust your instincts.”
6. Having no clear marketing strategy
You only get one chance to make a good first impression so it is crucial that your business presents a clear and consistent brand image. Not having a clear marketing strategy usually results in ineffective marketing or no marketing at all and this can have a seriously negative effect on your business. You need to make sure you are marketing your business even when you feel like you don’t need it as it will ensure customers visit during your quieter periods when you may not be doing so well.
You can make use of both offline and digital marketing to boost your business. Social media channels, specifically Facebook and Twitter are incredible marketing tools and email marketing websites such as MailChimp can help you to create excellent marketing campaigns so that you can email your customers useful information about events, offers and promotions. You can also begin to increase brand awareness in advance of your opening so you can build excitement and get the news of your new business spread digitally and through old fashioned word of mouth. Effect marketing will also allow you to get the most return from your promotions.
7. Underestimating your competition
Make sure you have a unique selling point to encourage customers to choose your store over your competitors and always try to stay one step ahead of your competition. Even if you have a business idea that you think is unique to you, don't assume that you have no competition as competition isn’t always from direct or obvious competitors. Make sure that the experience you create for your customer is flawless by ensuring seamless transactions and service so that customers choose your store over your competition.
8. Not knowing your finances & setting unrealistic financial goals
Businesses don’t usually make profit from the beginning. For most new businesses, growth is slow and it is important that you research how achievable these goals are before you set them. Setting realistic, measurable and time specific goals will save stress and time and will also allow you to preserve your credibility. Additionally, it can make it more likely that others want to invest in your business. Most businesses will experience effects of competitive pressures and market slumps and setting realistic goals allows you to overcome obstacles like these. To be able to understand and track your finances, it is essential that you have a till system that can monitor your sales data and stock levels of your store. This will allow you to keep a tight control on margins and wage bills so you can effectively manage your pay-roll.
“Turnover is vanity, profit is sanity, cash is reality.”
9. Insufficient knowledge of your product
It is crucial that you know your product and are confident selling it. There are strategies that can encourage sales. For example, effective visual merchandising, which can assist sales as you can encourage cross-sales by placing complementary items next to each other. It is essential that you know what is selling well and what isn’t as this can then allow you to consider if you should begin an offer or promotion to encourage the sales of items that aren’t doing so well or to encourage products that are best sellers by placing them in a prime shopping spot in your store. You should know what stock you have so if a customer needs something you can let them know if you have it at the click of a button instead of searching through your stock room!
10. Avoiding new technology
As a new business owner, technology can provide new opportunities, make your business processes more efficient and even help you save money. As technology is constantly evolving it means an unwillingness to adapt to technological advances can have a short term and long term negative impact on your business. Using technology for your business can put you ahead of the competition and allow your business to grow.