Starting your own business is a fantastic accomplishment. You have taken the first step in creating something entirely yours – no one can tell you what to do or how to do it. However, you should be prepared for the expectations versus the realities of owning and starting your own business. This blog post will discuss some of the most common misconceptions business owners have about such new ventures.
Expectation: “I need a lot of money, and I’ll get it from grants.”
One of the most common barriers to starting a business is the amount of money needed, and most of it can come from grants. While there are many sources of finance for business start-ups available, they are often very competitive and have strict eligibility requirements. If you are not sure whether you will be eligible for a grant, it is always best to consult with an experienced commercial lawyer. There are several ways to finance your business, including personal savings, loans from family and friends, credit cards, and even crowdfunding. It all comes down to the business model and the costs you may need.
Reality: “It’s easy to start, but it’s also competitive.”
The reality is that you can start your business with very little money in New Zealand, and the barriers to setting up your business are relatively low. Reserving your company’s name in New Zealand costs as little as $10. However, because of low barriers to entry, there are a slew of small businesses in New Zealand, which contributes to the high number of new companies that start up each year. Essentially, these small businesses also become your competition for getting grants.
Only a small number of businesses will qualify for government grants. You might want to consider bootstrap financing instead.
Bootstrap financing is when you use your own personal savings to finance your business. This can be a great option if you do not have access to traditional forms of financing, such as loans or investors. Bootstrapping can also help you retain complete control over your business.
There are many options for financing your business. The important thing is to have a solid business plan and be prepared to work hard in the early stages of your venture. Read more about overcoming the financing situation in starting a new business.
Expectation: “I’ll be rolling in money in no time!”
Another common misconception about starting your own business is the notion of becoming rich overnight. This could not be further from the truth. In fact, it is overwhelmingly common for business owners to work long hours in the early stages of their business, often for little or no pay.
Reality: “With great financial freedom comes more financial responsibility.”
The reality is that it takes time and hard work to build a successful business. It is essential to be realistic about your expectations for income in the early stages of your venture. Many business owners find it helpful to have another source of income in the beginning, such as a part-time job or freelance work. However, with this new income, you also gain the advantage of financial independence. The key to sustaining this is to ensure that you budget wisely.
3. Work-Life Balance
Expectation: “I can do everything myself.”
One of the biggest mistakes business owners make is thinking they can do everything themselves. While it is essential to be involved in all aspects of your business, you cannot do everything alone. You will quickly become overwhelmed and burned out if you try to handle everything independently.
Reality: “I need help!”
According to recent research on burnout, 30% of entrepreneurs have experienced depression, and over 50% have experienced full-blown burnout.
The reality is that you cannot do everything yourself. It is important to delegate tasks and build a strong team of employees, contractors, and advisors. When you delegate tasks, you will be able to focus on the most critical aspects of your business. Ensuring you understand and play to your own strengths and those of others’ will ensure that time is used effectively. Consider your prior employment and how you’ve been able to maintain a work-life balance. Ensure you give yourself a break and don’t neglect your basic needs like sleep, healthy eating, and social interaction.
Expectation: “People will understand my product immediately, and it will go viral.”
A great innovative idea can help your business stand out from the competition. However, even the best products will not sell themselves. You need to have a well-executed marketing plan to reach your target market and promote your product or service.
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Reality: “The product will need to change to suit the market.”
It is also essential to adapt your marketing strategy according to ever-changing environments. An example of this is the pandemic, which has forced companies to change how they operate, including how they market their business. Many businesses have moved to web-based marketing, and some have even switched to an omnichannel approach, spanning multiple platforms.
Understanding changing environments and adapting your business and marketing strategy accordingly will help you go to market successfully.
Expectation: “I’ll just put up a website, and the people will come!”
It is not enough to simply have a website in the modern business world. You need to have a well-designed website that is optimised for search engines and easy to use. You also need to make sure your website is mobile-friendly as more and more consumers are using their smartphones to browse the internet.
Reality: “I need a website, but that’s not enough.”
Although your website is just one part of your online presence, the marketing goal is to link the right customers with the right product. Omnichannel media, such as a solid social media presence and an effective marketing strategy, will help you reach the target audience. You might want to consider hiring a digital marketing agency to help you with this. An excellent digital marketing agency will be able to help you with everything from Search Engine Optimisation (SEO) to social media marketing.
You should also consider researching your competition as part of your marketing strategy. Knowing your competition and what they are doing well (and not so well) will help you create a Unique Selling Proposition (USP) for your business.
Another technological aspect to take into account is what payment methods you offer your customers. If you plan to ship your products internationally, you must consider which payment methods to accept. The most popular payment methods are PayPal and credit cards, but many others are also available. It is advisable to also research the different shipping options available and the customs regulations for the countries you will be shipping to.
Expectation: “My product is the best, so I can charge whatever I want.”
When pricing your products or services, it is essential to remember that you are not just selling a product or service – you are also selling the value that your product or service provides. You need to make sure that your prices align with the value you are providing.
Reality: “I need to balance what I’m charging and the value I’m providing.”
Pricing too high will mean that you miss out on potential customers while pricing too low will mean that you’re losing potential revenue. You need to find a balance between the two, which can be challenging.
One way to price your products or services is to consider your costs and then add a mark-up to give you the desired profit margin. For example, if it costs you $100 to produce a product, and you want to make a 20% profit margin, you would charge $120 for the product.
Another way to price your products or services is to consider what the competition charges. If you are selling the same products or services as other businesses, you must ensure that your prices are competitive. This doesn’t mean that you have to be the cheapest, but you need to be in the same ballpark.
You should also consider what your target market is willing to pay. If you are selling a luxury item, you can charge more than selling a mass-market product.
Finally, you need to consider what pricing will work best for your business model. For example, if you are selling a subscription-based service, you must consider what price point will encourage people to sign up.
Expectation: “It will be a breeze to bring my invention to the entire globe!”
More often than not, shipping is the last thing on a new business starter’s mind. They’ve already invested a lot of money in developing their product and getting it to market, so the last thing they want to do is spend more money on shipping.
Reality: “I need to factor in shipping logistics and costs when planning my business model.”
When starting a business, it is essential to understand your target market. Where are they located? Once you have answered this question, you can decide how you will ship your product to your customers. Read more for tips for businesses new to shipping.
Even if you just intend to deliver locally, taking into account delivery times and educating your consumers on when they will be able to obtain the goods can help you provide great customer service.
If you are selling physical products, you will need to factor in the shipping cost when pricing your products. This is because shipping can be expensive, and you need to make sure that you are making a profit on each sale.
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Starting your own business is a big undertaking, and there are many aspects to consider. You need to think about what you are selling, who you are selling to, and how you will ship your products. You also need to make sure that your prices are competitive and that you profit from each sale. If you take the time to research and plan, the likelihood of your business succeeding is much higher.