For an investor who has invested limited time, manpower, and financial resources into making a any business venture succeed, the only possible satisfactory result is success. Unfortunately, this isn’t always the case as many investors find their hard work and sacrifice being all for nought.
A good example of this is a starting a fashion business. After almost a year of toil and labour, not to mention taking a huge financial risk, your business is not earning as much as you expect it to do. You are not reaching the target market for the fashion style you are promoting. You have no choice but to close down shop with losses you have to live with.
One key factor that usually leads to a poor return on investment is poor marketing. This means the targeted consumers were not properly motivated to purchase a product, which implies a product has been created for an audience/consumer who has no interest in it. To avoid falling victim to such a circumstance as an investor, you simply need to avoid making the following common mistakes:
- Ignoring market trends.
The key to a successful business is knowing what the consumer wants and delivering it to them when and how they want it. If you invest your resources in a venture that seeks to satisfy a consumer need that doesn’t exist, you’re potentially making a huge mistake. Researching the market before committing to a business venture is always a smart move.
- Targeting the wrong audience.
A smart marketing plan is designed to communicate most effectively to a selected audience. For example, a marketing plan for power bikes will be targeted at a younger demographic because an older demographic logically has no use for such a product.
- Putting all eggs in a basket.
In business, you must always have a well-developed primary plan and at least a fall back plan. Relying on a single marketing plan can be catastrophic because the market environment is dynamic and things can change without warning. In order to be prepared, a smart investor will have a contingency plan to help respond to any unexpected changes. A contingency plan will also position you to take advantage of unexpected opportunities.
- Not being insured.
To avoid being a victim of total loss, a smart investor ensures that business activities are insured against possible calamities. For example, if you’ve decided to invest in a retail shop, you should insist on comprehensive shop insurance being in place. This way, if anything goes wrong, being insured will guarantee the business can get back on its feet.
Trying to find the money to get your business to the next stage of growth can be a difficult thing to do. Many are put off by the idea of asking sponsors for financial investment as it can feel almost a little bit like begging. Putting the time in and believe in yourself will attract the right kind of investor.