Starting a Business Online: The Top 4 Mistakes That can Break the Bank

Mistakes are often considered as lessons learned. The sad part is that a number of them possess price tags, and they can drain your bank account in a jiffy. So while errors are the greatest teachers, prevention will always remain a whole lot better than cure.

Avoid these costly mistakes like a plague:

Forgetting about Your Business Plan

Interesting enough is that a number of businesspeople know how to create business plans, but instead opt to ignore them. Perhaps they believe they have enough capacity to run the business on a day-to-day basis. This may be true, but then business plans can do so much more besides citing your business objectives and marketing strategies. They also include the financial aspect of your business, from operational expenses down to projections. This alone helps you control your budget and monitor cash flows.

Second-guessing Your Shipping Costs

This is especially true if you have made it your responsibility to pay for shipping. This one, however, is very easy to resolve. The easiest way is to pass on to your consumers the shipping cost. You can also research the different carriers in the market to find out, who offers the most affordable courier charge, particularly for international deliveries.

Coming Up with Untargeted Market

To understand the importance of targeted market, consider this example. Let’s pretend you’re spending $0.005 for every e-mail sent. You have 10,000 subscribers, so your total e-mail marketing campaign cost is $50. It’s not a lot, right? But multiply it by 12 months, and you’re actually spending $600 each year. Because your campaign is untargeted, only 2 percent of your total untargeted subscribers are willing to spend and buy your product. So you end up losing $580.

Determining your targeted market is as simple as asking yourself, “Who will benefit the most from what I’m offering?” Then narrow the demographics down until you can identify your niche. You’ll end up with fewer leads, but they can be the most loyal patrons you’ll ever have.

Not Hiring

It’s understandable why you don’t want to hire people. You want to save on labor costs as much as possible. This will only work, though, if you’re starting out. If you have plans to expand, you’ll definitely need people. For example, by working alone, you can sell 100 units at $20 a month ($2,000), but by getting a telemarketer, the number can increase to twofold.

Nevertheless, hiring the wrong people can also be a liability, and you still lose money in the end. So scrutinize each of your applicants before you finally choose the one.