by Shaheen Darr

Created on: August 17, 2009   Last Updated: July 25, 2010

It is an exciting prospect to run your own business but there are some areas you need to pay attention to or you will end up making mistakes that can prove quite costly:

Finances
It is important to restrict borrowing to match business requirements in order to make repayments easier. Over borrowing can stretch a business budget and put a lot of financial pressure on the business as can overspending on furniture and fixtures and other equipment that is not immediately required by the business. At the commencement of the business, it makes sense to budget and spend only on necessities essential to its running.

Business plan
Working without a business plan means the business has no long-term objectives or forecasts planned. The businessperson can soon lose his focus without any concrete targets to work towards and in case any borrowing is required, without a business plan this can become quite difficult. Not having a business plan shows a lack of vision on the side of the businessperson.

Market research
Do not start a business without first conducting market research on the products you plan to sell, customers requirements, existing competition, the business location, pricing and marketing strategies. Market research can give a leading edge to new businesses and encourage existing ones to divert into newer and more profitable fields.

Marketing
Once the business is set up, it is important to market it to its customers to make them aware of what it does. Talking about the business to existing customers and networking amongst businesses contacts to create a wider client base is essential. Offline advertising methods to maximise business awareness include flyers, placing adverts in local newspapers and magazines and putting posters on shop windows. To create an online presence it helps to set up an informative website and follow up by prioritising any enquiries so as not to lose prospective customers to competitors.

Pricing
Unless it is selling a unique product which it has a monopoly in, a business that is not price competitive will lose customers rapidly. It helps, therefore, to research prices being charged by other stores for comparison before starting to sell its products. In this case, sourcing cheaper supply sources can help smaller businesses charge a competitive price and still have room to make a profit.

Stock
Buying products from cheaper suppliers can sometimes mean that the businessperson starts to overstock one kind of product. Even though it seems to be a good

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