By George Otte
Not all of the challenges that you’re likely to face as an entrepreneur are avoidable. However, most can be contained or surmounted with foresight, planning, and resolution.
Here’s how to mitigate or avoid six of the most common risk factors for startups.
1. Lack of Understanding of the Market
Before you formally set your business idea in motion, you need to make sure you’re pursuing the right idea at the right time.
One of the most common causes of early-stage business failure is a lack of due diligence: market testing, product research, and especially competitor analysis. Your due diligence may reveal that you’re entering a crowded, fiercely competitive marketplace — or that you have a tailor-made niche practically to yourself. This alone could be the difference between success and failure.
2. Nonexistent or Unclear Growth Strategy
Once you have a clear understanding of your market, you need a clear understanding of how you’ll grow into that market.
“Growth strategy” sounds intimidating, but developing one is actually a straightforward proposition. Start with a pre-made template and fill in with specific, relevant information based on your understanding of your business and your market research activities.
3. Unclear Value Proposition
“Your company’s value proposition is the clearest possible distillation of its mission, values, and objectives.” — George Otte
The value proposition is a compelling message that answers the question posed by every prospect who considers giving you their business: “What can you do for me?”
If you can’t answer that question clearly, concisely, and persuasively, you may struggle to gain traction with your target audience.