All business activities come under two broad categories - industry and commerce. When a business produces some goods, it is referred to an 'industry', and when it distributes, it comes under the 'commerce' domain.

A business, whether it is an industry or commercial enterprise, involves risks and challenges. While starting up a business, a business entrepreneur has to be skilled enough to innovate and combine resources in the form of men, materials and money.

In this article, we are going to discuss some of the major mistakes businessmen are prone to during the initial as well as most crucial stage of their business.

1. Poor market research: Proper market research is very important for any business to succeed. Most business owners spend less time in researching business their ideas, the target market and customers. It is easy to get carried way with a business idea that first seems exciting but fails later. Proper market research is the key to check the viability of a business idea.   

2. Inadequate and insufficient knowledge of the market: No one buys a product if he/she does not want it or believe he/she does not need it. It is therefore very important to be well aware of the customer needs and expectations before targeting a market. Carrying out field research, analyzing already existing data can be most useful in knowing the customer better.    

3. Weak financial planning: Proper financial planning is very important to succeed in any business. A business owner should always keep himself ready to face sudden and unexpected challenges such as interest rate rises, transport strikes, political instability, etc. which may impact on cash-flow.

4. Lack of sufficient capital: No business can survive without capital. It is therefore very important to determine how much money is required to start up and carry on a business, and from what source it can be collected before starting up a business.

5. Lack of expertise: Very often than not, new business owners have very poor knowledge of different financial aspects of business. To manage money cost effectively, it is better to hire a financial adviser in such condition.

6. Over-optimistic forecasts about business potential: A common mistake for new businesses is to set unrealistic forecasts about business potential. For example, new businesses often mistake its market size larger than it actually is and waste money recruiting too many employee or buying unnecessary equipment.

7. More focus on sales than profit: New businesses are often tempted to sale more and focuses less upon profit. This may result in order for more products than a business can produce with its available resources.

8. Quick expansion & diversification: A new business should not focus upon too many markets or to many fields of business at the initial stage. It increases responsibility as well as risk. First, concentrate upon one (or two) markets and the core business, and think beyond them only after getting settled.  

9. Poor business plan: A well written business plan is most useful to get an overall picture of what one has to do for the future improvement of one's business. It is also important to convince a bank or commercial institute to avail business loans.

10. Failing to understand the competition: At the starting up phase of a business, it is very important to monitor the competition in the market. Without proper understanding of the competitors in the market, a business cannot make its products, services and marketing stand out.  

11. Failing to find reliable suppliers: Most business enterprises fail to find out suppliers which can provide good products at competitive price. To be successful in business, one must have procure products which are of superior quality despite being fairly priced.

12. Poor customer control: While selling your products to customers, always be aware of delayed or non-payment. Offering credit to unreliable customers can put a business at risk.  

13. Inefficient stock control (inventory): In any business, keeping ready the right amount of stock in the right place at the right time is very important. Having the right amount of stock on hand can protect a business when the supply chain is broken temporarily. In contrast, keeping excessive amount of stock can result in tied up of capital unnecessarily.   

14. Over-investment in fixed assets: At the initial stage of a business, it is unwise to invest so much in fixed assets like office furniture, decorative items, etc. It drains cash which can be used more fruitfully in the business.  Instead of buying 'not so important' assets, leasing can be a better option.  

15. Improper employee management: Hiring the right people and manging them is very important for efficient business management. Recruit people as per your requirement and delegate the right task to the right person.

Research has revealed that a business is most prone to the above stated mistakes during its early years of trading. A business entrepreneur must be aware of these common mistakes and avoid them to find his new business a great success in the future.