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Many great business ideas fail to take the shape of a business and this is due to four main hindering factors: atrocious costs, exhaustive labor, missing the target and lastly the lack of exclusivity.
Atrocious costs
It is very difficult practically for a business idea which is based on very high costs to run smoothly while still being able to make a suitable profit. From an investor's point of view, high operation costs is a big 'No'.
Solution:
- Reanalyze to find ways of implementation with lower costs.
- Its better to over-estimate, keeping some margin for inevitable surprises.
Exhaustive labor
In a business or manufacturing unit which demands exhaustive labor, the prospects are not very hopeful. Having to manipulate a large number of staff and handling tedious processes is the wrong path for small entrepreneurs.
Solution:
- Prefer to opt for simpler procedures.
- Modify your process and plan to avoid intensive labor processes
Missing the target
Profit making depends on the identifying the target market, most businesses fail because they simply can't find a revenue stream, particularly for online businesses. Pricing the product is also an important factor which can attract or repel the target market.
Solution:
- Analyze your market thoroughly
- Figure out if there's sufficient and sustained demand.
- Price your product reasonably but smartly.
Lack of exclusivity
Many new businesses introduce attempt to introduce unique profit-making ideas. But due to heavy competition, the 'uniqueness' doesn't last very long as many competitors adopt the same strategies and this often leads to a commodity trap.
Solution:
- Get your intellectual property patented if possible. If not the entire product, then patenting a part of the process also helps curb copycat businesses.
- Make sure you USP and top services can't be beaten easily by your competitors.
- Try not to go head on with big competitors as they have the resources to knock-off your idea cheaply and quickly.
- Avoid creating a product that's already got a big chunk of the market unless it has it's own very distinctive USPs.
- Keep an eye on the market to know what is being copied, who’s copying and what others are doing to secure their identity and business ideas.
