5 Fatal Financial Traps You Must Avoid When Starting Your Business

It's undoubtedly true that nobody's perfect. We all have our wins and losses, especially when it comes to investing As a business owner who wants to grow his business, you must try to avoid the following mistakes

1)Not Having the Basic Understanding of the Business:Warren Buffet, one of the world's most successful investors, advises against business models you don't have a basic understanding of. It's advisable that before you invest in any business, try and have the fundamental knowledge of that business.

2)Too Much Investment Turnover :Expectation of too much turnover at the early stage of your business can be a big trap if not carefully handled.Put in your best in terms of time and every other resource. Make judicious use of the turnover the business brings by ploughing a fraction of it back into the business. Growth comes with time

3)Not Defining Your Market and Target Audience :A common startup mistake is not taking the time to understand the market or customers you’re building for.For you to start and build a successful business, you need to understand your market and target audience. It's your target audience that determines whether you'll succeed or not in your business

4)Not Having A Business Plan:Too many businesses start without a basic plan, and if you fail to plan, you are essentially planning to fail. A startup should map out a business plan, even if it is just one page. It should include how much it costs to operate, how much they anticipate selling, who would buy their product and why.

5)Undervaluing Your Product or Service:
Don’t price too high, but don’t price too low just to gain market share. If you are good, price like it! Many entrepreneurs start with the best of intentions and give things away for free or do free things for charity, community or visibility. Be very careful with this because you don’t want to be known as a source of freebies. Ring the cash register first.