Hiring the wrong people
When starting a new business solely on scratch or buying an existing business with new employees hiring the right people will lead you to success.
Many managers and business owners always hire the wrong people when starting a business, and this is one of the biggest mistakes.
The most common mistake many business owners make is hiring someone they know, whether it is a family member or a friend. Yes it is nice that you hire a person you know because you trust them rather than a stranger you do not know.
You might trust your friend or family member, but most of them are not very skilled or qualified for the position than someone you do not know is. Hiring someone that has skills and good experience will benefit your business much more and help you not lose your money. It will help your business generate more income if the person you hire knows what they are doing and help you become successful.
Many businesses start their new businesses without much knowledge on their products. They price their products either way too high or way too low. When dealing with the pricing you should know what the market is like for the product. Look at competitors that have the similar products you are selling and go from that.
You must also have the selling price more than the price to make it and the overhead costs to have it sold in the store. Your selling price must be greater than the variable cost in order for you to make profit. Otherwise you will lose money and go bankrupt. If you have a product that is unique and you’re the only one that is selling it then place the price in a moderate range. If your quality is greater than the market then make the price a bit more expensive but not too expensive in the start. Because remember, no one knows what your product is because it is new. The price should also be greater than the cost.
Having a lack of knowledge or passion
When starting a new business, the most important thing is to have knowledge on your business and be passionate about it. Many people start a business because most others are starting it and are doing great at it. For example, someone will open a barbershop because all their friends are becoming successful at it but you can’t become successful at something you know nothing about. You need to become informative and have knowledge on your business you are trying to start.
Another great example is, you start a car dealership business but know nothing about cars. A customer will come up you and ask something about the car but you have no idea what they are talking about will make the customer go away because they do not trust your business. That will affect your business greatly. Before starting a business, research and study everything you need to know that way you will be prepared to start and run a successful business. Also if you are starting a new business, be very passionate about it because then you will love your business, that will also benefit your business and lead it to success.