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Navigating the Seas of Entrepreneurship: 7 Pitfalls You Need to Avoid as a Small Business Owner

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StrategyDriven Entrepreneurship Article | Entrepreneurship | Navigating the Seas of Entrepreneurship: 7 Pitfalls You Need to Avoid as a Small Business OwnerAs an entrepreneur, learning to navigate the business landscape can be tricky, especially if it is your first time starting a business. Learning the hard way is never advised if you can absorb the lessons of those who have sailed into the business world before you. However, as an entrepreneur, you may be facing greater risks than normal that can potentially become snares on the path to success. Consider these seven pitfalls to avoid if you want your company to flourish.

Not Setting Clear Goals

A business owner who does not take the time to set clear goals and objectives will travel in many different directions, and is more likely to waste time, money, and effort in the process. Avoid making the mistake of “winging it” as you go, or you may find yourself nowhere fast, or moving in unprofitable circles. Not setting logical, measurable goals can result in great frustration and disorder. Goals and objectives serve as a way to determine whether or not the company is making meaningful progress. Without goals, it is far more difficult for employees to meet quality standards, and for CEOs to make intelligent decisions on behalf of the business. Making your goals too general, or creating unreasonable, elusive aims can leave you and your employees wondering whether the company is sailing forward, or stagnant at sea.

Not Performing Market Research

Many individuals may brainstorm what they believe is a great business idea, but it is a mistake to avoid performing thorough market research before launching any type of business. By understanding the intended industry you plan to break into, you can make more strategic moves to obtain higher influence and more customers while blazing a trail to success. Selecting an oversaturated market can also make it far more difficult for your business to excel, so it is recommended to pick a niche market that you can dominate in.

Not Defining Your Target Market

A business that intends to serve everyone often ends up serving nobody well. It is crucial to focus on a target audience as an entrepreneur. The Small Business Chronicle declares that any company that lacks a target audience can have haphazard promotion strategies, severe budget issues, ineffective consumer tracking, and poor site traffic and conversions. If you know who is a part of your target audience, then you can invest in marketing, omni-channel advertising, and product research and development accordingly.

Not Having Adequate Capital

Ensuring that you have enough financial resources to launch and keep the doors of your business open is wise. It is critical for business owners to secure enough capital to execute operations,obtain efficient, industry software and equipment, and to compensate employees (if you have them). As a small business owner, you can get a loan to help meet fundamental financial needs required to launching and maintaining your business. With a combination of personal funding, loan monies, and funds from investors, you can successfully fuel your small business.

Not Following a Solid Budget Plan

Having money at your disposal is not enough. Acting without a detailed budget plan for your company is reckless and can lead to a significant waste of resources. The Small Business Administration reports that about half of small businesses survive the first five years, but only a third make it past the 10-year mark. Business failure is often a result of the lack of financial resources. CEOs that are too eager to launch without being prepared for both fundamental and unexpected expenses are often stricken by surprise. It is not unusual for a small business to make little to no profit during the establishment stage, so your access to financial resources must be secure until you can generate a steady profit.

Not Creating an Online Presence

Billions of people browse the internet daily, and a huge number access social media platforms every day. If you want to launch a successful business, you cannot underestimate the power of an attractive online presence and reputation. In addition to creating an excellent website that is easy for visitors to navigate, your site and sales funnels must be mobile-optimized for stronger search engine optimization (SEO). Forbes suggests that your site should be mobile-optimized to rank higher in search engines and to cater to the growing mass of mobile users.

Integrating social media marketing into your company’s marketing plan is fundamental to expand your reach to any target audience. Tons of consumers regularly use social media to interact with friends, family, coworker, and strangers, and they are often glad to share their experiences and review companies that they deal with. The Pew Research Center reports that nearly 90% of 18- to 29-year-olds use social media, nearly 80% of people aged 30 to 49, and about 64% of people aged 50 to 64. If your company builds a significant online presence and maximizes it through social media, you can obtain widespread exposure for your brand, and boost your sales significantly.

Not Selecting the Right Partner

One serious pitfall that business owners must avoid is selecting a terrible partner to go into business with. Giving up too much equity too soon with a bad partner is a move that an entrepreneur can live to regret. Although the excitement of launching a business with someone to assist you may seem like a good idea, if you end up at odds and ends with your partner, it will likely cost you in an expensive separation. However, selecting the ideal partner that possesses strong industry knowledge, passion, and is fully committed to the company mission is a true advantage. When you are feeling anxious, your partner can provide encouragement and offer solid advice and direction. Entrepreneur suggests that selecting someone who complements your strengths and weaknesses and shares your vision for the company is key.

Achieving success in a business does not occur by chance, but it is often the result of extensive preparation, deep work, compatible partnerships, and strategic execution. Creating a detailed business plan is the first major step to take to sail towards success in any industry. Having a mission that resonates with your values and the type of brand that you desire to represent to the world is essential for becoming fruitful in entrepreneurship. Small business owners that do not heed the warnings may find themselves out of business and in debt within the first few years. If you cover all of the bases and avoid dangerous pitfalls in your business, you can attain excellence on your journey.

Setting Yourself Up For Success as a Freelancer

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StrategyDriven Entrepreneurship Article | Freelancer
 
Many people crave the freedom that comes from working for yourself, be this as a freelance individual or a small business owner.

The reality is that many people today, and particularly in the new year are making the transition from being employed to being self employed, but the two worlds are so disparate it can be useful to learn some of the freelancing core principles in order to set yourself up for success.

In this article, we’re going to take a look at some of the differences between employment and self-employment with a view to helping you set yourself up for success as a freelancer.

The Safety Net of Employment

The majority of people have financial commitments and a lifestyle to maintain, perhaps even a family to provide for, so starting up as a freelancer is something that should be considered carefully because whilst there are many benefits to being a freelancer, one of the greatest concerns is that you will be trading the financial security of a job that pays you regularly with the uncertainty associated with working for yourself.

Of course, with a decent plan and fantastic execution, you can secure your own future and there’s no reason why you cannot replace your full time income as an employee with freelance work; but it’s important not to “bite your nose off to spite your face” which is why many people set up a freelance business whilst remaining employed.

This way, as the freelance side of things picks up and grows over time, you can start to reduce your hours at work or even quite altogether – but it allows you the safety net of keeping a basic income whilst setting up your freelance business. In the alternative, you could consider an insurance policy that pays out if you are unable to work due to ill health – something many employees take for granted, in terms of statutory sick pay in addition to company specific policies.

With that said, freelancing can be a great way to earn money as you are more able to have your work fit around your life, rather than having to fit your life around your work – or rather, your boss’s demands!

Feast or Famine

The freelance lifestyle tends to be associated with much more freedom and flexibility, however, many freelancers work seven days a week, as there’s a touch of “feast or famine” when it comes to freelance work.

There will be periods of feast where you are overwhelmed with work and can barely keep up with demand, whilst at other times, there will be very slow periods where there’s barely any work.

There’s a saying about making hay that is appropriate for the freelance lifestyle, as akin to how a squirrel works very hard to gather nuts in autumn, you need to gather as much money as you can, when the demand is high.

The challenge, however, is that you can find yourself running into periods of exhaustion due to responding to high demand. You therefore need to focus on pacing yourself, and considering ways to maintain a steady flow of work. This can be challenging as most people want their project to be completed almost instantly.

Keeping Costs Down

When it comes to making money, revenue should be a secondary aim to profit – and one of the best ways to maximise your profit is to keep your costs down.

Interestingly, as a freelancer, one of the most expensive costs associated with business is the cost of marketing your services. Whilst word of mouth is one of the most effective forms of marketing, it takes some time before word of mouth starts to reach a level which can sustain your business – meaning, at some point, particularly in the early days you are going to have to pay for advertising of some description.

This is where platforms such as Freelancer and Fiverr come in. Admittedly, they charge a fee in terms of a percentage of the revenue derived from the project – but as they only charge you when you are making money, it’s cashflow positive, meaning you don’t have to shed out lots of money with a risk of getting nothing back in return.

Staying Compliant

There’s something about being a freelancer that feels a lot less formal than having a business in the conventional sense, it feels a lot more “free” in the sense of it’s free from regulations associated with having a limited company where you must publish accounts and annual return documents.

However, freelancers are still subject to stringent rules around paying tax, and laws such as contract, negligence, and misrepresentation.

If you’re used to being an employee then you won’t have had to deal with tax matters before, as this tends to be done by your company’s HR department. Yet, as a freelancer, this responsibility falls on you – and if you fail to comply with tax law, it can have very serious consequences.

That said, the benefit of being a freelancer is that it means a lot of your expenses are tax deductible which means you are likely to be paying much less tax on your income. For instance, when you consider that driving to a meeting is a tax deductible expense, but the cost of your daily commute as an employee isn’t – shows how much of a better deal freelancers tend to get.

Staying Motivated

As an employee, it can be easy to stay motivated, in the sense of staying on track – because you have someone breathing down your neck to make sure you reach targets and are accountable for your performance.

As a freelancer, however, you have more freedom, meaning you don’t have this burden… yet, in some ways with more freedom comes more responsibility – and in this context, you have the responsibility to keep yourself motivated and on top of your workload.

This is where goals, and goal planning comes into play, as this will keep you on track to perform at your optimum.

In summary, starting out as a freelancer has many benefits from time freedom to tax advantages, yet, it is a completely different world to employment and lacks some of the security and structural advantages.

Investment for Small Business Owners

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StrategyDriven Entrepreneurship Article | Investment
 
Running a small business in the current financial climate can be tough. There are a plethora of challenges to be faced on a daily basis. If you’re a small business owner that is tired of the financial uncertainty that can happen, and would like a little more security to help flatten out the lows, then starting to learn how to invest small amounts of your money to provide a different source of income could be the answer you’ve been looking for.

While investing can become a great safety net for your business, there are many considerations to ensure your success. It can be a great tool for building your wealth, but it’s a common misconception that it’s only for the wealthy.

What is investing?

Investing, in its most essential form, is the act of committing money in the hope you’ll make a financial gain or profit. A portfolio of investments built up over time can allow your money to work smarter, rather than you working harder.

Investing can also be a great way to take financial responsibility for your future. It often means committing an amount of money, we would have used for something else, such as purchasing new clothes or going to a fancy restaurant. Swapping the instant gratification of consumerism for an investment in your future requires discipline and an acknowledgment of your responsibility to your future self.

Investing can take many different forms. Most of us are aware of the stock market, but stocks are from the only way to invest. There are also mutual funds, commodities, Forex, bonds, ETFs, or real estate.

Any act that involves staking an amount of money for future returns is technically investing.

Technology and investing

Over recent decades, technology has made investing more accessible to everyone. This has helped to drive down fees. Many of the functions of a traditional trader can either be performed by investors themselves, or by using a subscription-based platform.

Now we can jump on the Internet to compare brokerage fees. We can look at online reviews and often play with a free sample of their software. This has empowered investors and investment advisors by providing a range of new tools that can perform real-time research and analysis, and even warn you when certain pre-set conditions are met.

StrategyDriven Entrepreneurship Article | Investment
 
Start small

When you first start out investing the sheer volume of information can be confusing. Everyone knows what’s best or has a foolproof strategy to sell you. The best way to get started is to jump in at the deep end but in a very small way. You can start trading penny stocks, or only invest a very small amount, just while you get a feel for how the system works.

This will allow you to experiment with no real meaningful consequences. You can familiarize yourself with how the different systems work, what information and resources help you, and discover your own preferences. There are numerous approaches out there, and this is partly because there is no one system that fits all. As you progress you will gradually define your own parameters and discover what levels of risk you’re happy with.

Only using money you can afford to lose will prevent you from taking needed money away from your business. While you want your investments to enhance your income, it’s important not to be carried away if you enjoy some success.

Learn as much as you can

While there is an overwhelming amount of information out there, being selective can reap rewards. Join respectable forums and ask for advice on the best reading material, discover the best commentators to follow and learn from, search for helpful free resources, such as e-books, videos, free commodity charting, industry and investment news resources etc.. The more you know, the better you are likely to do.

Some investments require much more in-depth knowledge to take advantage of, while others require much less maintenance. If you’re managing your own investments, then the time commitment required should be a serious consideration.

Know yourself

As well as understanding the levels of risk you are comfortable with, it can be good to formulate a longer-term plan of what you intend to do with your investments. What are your personal objectives and goals? The goals for your business? Are you simply trying to accumulate wealth for the sake of it, or are you trying to ensure your retirement is comfortable?

Understanding these different factors can also help you to better understand your risk tolerance, and help you select investments that mature within a suitable timeframe for you to achieve your goals.

Variety is the spice of life

Diversify your investments. Having all your eggs in one basket increases your exposure to risk if something goes wrong. By spreading your money around, whether it’s different commodities, companies, or types of investment, you’ll help to mitigate this risk and ensure you never suffer any catastrophic losses.

This will mean learning about different types of investment, but you don’t always need to understand every minutia of a system in order to invest in it.

StrategyDriven Entrepreneurship Article | Investment
 
Always maintain a cool head

It’s not wise to go into investing expecting to get rich very quickly. Try to keep emotion out of your trading, instead relying on proven techniques and hard data to drive your decisions. Markets will always fluctuate, and a knee-jerk reaction can sometimes be worse than taking no action.

Shop around for a good deal

Whether you are speaking to a broker over the phone or using an app, there are always fees and charges. Sometimes it’s a set fee; other times it’s a percentage of your profit. Shop around and compare the different deals available, not just for the cheapest, but for the one that offers the most value to you.

Align your investing with your personal beliefs

If you’re new to investing it can be hard to know where to invest. However, where investors put their money can make a powerful statement. If you believe in sustainability or protecting the environment, then search for investments where the company acts ethically and with responsibility.

Becoming Self Employed – Is It For You?

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Becoming self employed is an attractive prospect for many people. It offers a degree of flexibility and you have no boss to answer to. Being self employed can also be lucrative, any profits made are yours once you have met ongoing costs. If taking the plunge to go self employed appears tempting, it is important to take a rain check and remember that there many downsides too.

StrategyDriven Entrepreneurship Article | Freelance
 
One of the main cons of being self employed is that being employed on a payroll actually offers a great deal of security. When you decide to become self employed you give up many of the benefits enjoyed by employees. Employment gives a worker lots of rights including, a contract, regular pay, sickness and holiday pay as well as some legal protection. Of course as a self employed person you can still access benefits, but it will be instigated and paid for by yourself. Thankfully there are lawyers who specialise in offering support to businesses in different sectors, for example a truck labor lawyer will represent truck drivers working on a piece rate basis.

So why do so many people choose to go self employed, when there is so much security and benefits to being an employee? Read on to discover why some business owners choose to make the switch.

Earning potential

Most people working on a freelance basis earn more than if they were self employed in the same role, in fact it is estimated at around 45%. You are able to put certain expenses through “the books” which further enhances earning power. As you are working for yourself you will be able to develop your business without constraints, you will be able to pitch for work at higher prices as your reputation grows and any profit will be yours.

You are your own boss

Being self employed means that you don’t have anyone monitoring your every move. You will need to meet the requirements of your clients, but how you get there is up to you! On the flip side however, you will need a high degree of motivation and a strong work ethic. Otherwise your business will not progress as much as you envisaged.

Flexibility

If you require time off to watch the kids nativity or go to the dentist, you won’t need to grovel to your boss. You won’t be constrained to the 9-5 routine, as you can choose your own hours. This is particularly useful if you wish to become a player on a global scale in the future, as you will be accessible 24 hours a day and not just when you are in the office.

Variety

Being self employed and running your own business is a constantly evolving role. You need to stay one step ahead of your competitors in order to survive in the marketplace. You will need to adapt manufacturing processes, services and product design to meet your target audience requirements. All of which offers variety to your role.

To conclude lots of research needs to be undertaken prior to becoming self employed, but if you’re sure that being self employed is for you and your personality will allow a high level of commitment, then take the plunge and enjoy the freedom!

Solutions to Effectively Reach Your Target Audience

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StrategyDriven Online Marketing and Website Development Article | Target AudienceReaching your target audience can often be a struggle. For a business just starting up, understanding how to best achieve this goal is vital in the early days. Start on the right foot and spend time, money, and resources focusing on appropriate ways to reach and appeal to your target audience. Below are a few handy suggestions for implementing the best strategy going forward.

Defining your target audience

Before you do anything else, you need to take time to work out who your target audience actually is. By identifying your target audience, you can begin to understand the niche that your consumer would fall into. With this knowledge, you can ensure your marketing activities will reach these people. Factors to research include:

  • Demographics – gender, age, profession, income
  • Psychographics – values, attitudes, likes/dislikes, how they think/purchase
  • Behavioral – the way they consume media and data. Is it offline/online? Any key sites or publications?

Once you have a strong understanding of the above you can begin to tailor your marketing, so you can directly connect your audience.

Reaching your target market

Now that you are familiar with the behavior and demographics of your target market, you can look into the best ways to reach them. For some, this will involve offline marketing techniques such as direct mail marketing, word of mouth, newspaper campaigns, and billboards. However, an overwhelming majority of marketing these days takes place online. Your digital marketing campaign needs to be top notch for audiences to discover you among the competition you’ll likely be facing.

Digitally reaching out to your audience

Email Newsletters

This technique may seem old hat to some, but email newsletters are still a simple, cost-effective way that you can directly reach out to your audience. You can deliver targeted messages efficiently and it won’t need a big team to implement. You can keep content simple and create instant impact with broad reach. Be aware of the GDPR regulations; but apart from this, the world is your oyster.

According to Econsultancy, ¾ of companies agree that email offers ‘excellent’ to ‘good’ ROI. Active email accounts are expected to hit 5.6 billion by 2019.

Hubspot

Facebook / Instagram ads

Social media marketing is the current trend that looks like it’s here to stay. With constant updates and content to capitalize on, such as Insta Stories and Facebook Live Video, it has never been easier to tap into audiences. Keep your social media pages current, looking out for opportunities to through hashtags, for example, and spend resources on fresh, visually appealing content that will get your target audience stop scrolling and pay attention to you.

Search engine marketing

Search engine marketing is paving the way for businesses to find their audiences. Having an intrinsic understanding of who your audience is can assist you in more ways than one. You will be able to identify not only what your target audience is searching for, but how they are searching. Through keyword research and analysis and Google Ads campaigns, for example, you can ensure your business is right where it needs to be for customers to find you. Get a team behind you and visit digitalmarkgroup.com. Outsourcing will provide you with the expert knowledge to take your campaign the extra mile.

Banner advertising

Banner advertising works by providing a visual ad that links to your website and is intended to generate traffic. This type of display advertising relies mainly on aesthetics. It promotes your services like a physical banner or poster, but is instead visible on another web page. You can use advertising guides and networks to assist you in creating the ads. Used effectively, this are a great way to share your services through sharp visuals that are designed to attract your target consumer.