Studies have shown that roughly 20 percent of new businesses survive past their first year of operation and over half of businesses discontinue operations because of lack of profits or financial funding. Every business owner wants steady business growth, which can only result from attracting potential customers, massive sales and huge profit.
A business has to pass many stages of growth and development, but not all business owners have been able to achieve steady business growth. So many factors can actually cause this, but this article covers four common mistakes that hinder the growth of business startups.
1. Compromising your business value
Some entrepreneurs compromize their values when speaking to clients especially during the startup period. Desperation for profit usually leads to taking any business deal, which leads to regrets.
This happened to me until I made a resolution at the beginning of 2014 that led to explosive growth in my business. I promised myself I wouldn't provide services to clients that I will end up feeling bad or take on business opportunities that weren't aligned with my values. Even if I was cash-strapped, I would say no to clients that weren't the right fit.
I truly lost potential business deals, but my business has generated more income since the day I made that decision than all of my other years in business combined. When you don't compromise your business standards, you attract opportunities. But, on the contrary, when you're desperate and your clients sense it, you'll probably end up with less for your effort.
2. Using a bad business name
A business name gives clients, partners and investors an impression or perception about your business. The company name you select for your small business has numerous branding, marketing and web implications, so needs to be carefully considered. Your company name goes before you and needs to be memorable. Plus, your business needs a website and app. You have to come up with a good, catchy name to promote your brand.
Finding the perfect name for your business -- one that represents you and your ideas -- can be an uphill task. You can use a free business tool like Namobot to get great business name suggestions that are unique, relevant and brand oriented. If you want people to fall in love with your business, carefully consider your business name, make it sound catchy, short and have a great meaning.
3. Seeing every competitor as your enemy
Some entrepreneurs naturally see their competitors as their enemies. These kinds of entrepreneurs are so focused on business competition that they can't creatively have a solid competitive advantage to move to the next level. Some people actually need the help of their competitors to excel. I have seen a big event planning organization contracting some of its services to smaller organizations (competitors) in order to successfully a common goal.
I'm not advocating that you should ignore your competitors or be friendly with all them. You should know who has your back and who wants you down. They are lots of things you can achieve together if you have a good competitor, especially for business startups that needs referrals or willing to play a third party role for business deals and recognition.
4. Failing to prepare for the worst
Business is all about taking risks. Sometimes everything works out great, other times it doesn't. Some businesses fail miserably. Some survive and even thrive afterwards.However, for a business to make it through the hard times, the owner needs to be prepared to face and overcome the adversities.
In an email interview, Dennis Wilding, CEO of Wilding Wallbeds said, "As our company grew out of the backyard (literally) and we needed more manufacturing space, we started with a 30,000 square foot building to house our up and growing company. And it was still not enough. Unfortunately, we had scarcely moved into a new facility before I realized it was too small. What a shame to be cramped in a brand new building. So, within nine months of being in our new facility, we broke ground on an addition that would double our manufacturing space. Of course, there were significant disruptions and headaches during the building process which affected manufacturing efficiency and cost money but in time but we were able to get on the right track again."
Preparing for the worse while working hard for the best outcome will protect your health from collapsing and also make you have a plan B should things didn't go as planned.
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This article originally appeared on Entrepreneur.com. Minor edits have been done by the Entrepreneur.com.ph editors