Here is our top 10 list of mistakes people make when starting a business:
1. Not enough money: The most common reason why new businesses shut down is that the owner runs out of money. Cash flow is critical to a startup business. You could be profitable and still have to close your doors because your customers are taking too long to pay you. Cash is king in a startup venture and you need to prepare for it.
2. Not thinking survival: Starting a business is all about survival. How do you stay around one more day so that you can learn more about your market and close new customers?
3. Losing momentum: Many new entrepreneurs have ambitions to start a business so they create a website, try to make a few sales, go all out for a few months and then stop completely. Building a business is all about momentum. If you had 24 hours to spend on a business they would be put to far better use by spending one hour a day than for 24 hours straight.
4. Doing it all alone: Nobody is perfect or has the skills to do everything themselves. You need to understand what it is that you bring to the table and what you need to surround yourself with. If, for example, you are very strong at inventing but don’t want to sell then you need to find a salesperson to help you.
5. Not hiring right away: You should begin looking at who can be brought on board to help you from the first day of starting your company. There will be tasks in any business that you, as the owner, should not be focusing on if you hope to build any sort of sizable organization. Why are you doing admin work when you should be out closing customers, talking to the media, and landing new partnerships?
6. Doing it just for the money: If you don’t truly love your business then you won’t be successful. If you read the stories of famous entrepreneurs and how they built their organizations you will find that it all comes down to the root of loving what you are doing.
7. Getting to year 1, past year 2: Many entrepreneurs have a hard time getting to the end of year one. Typically it’s because they started the business on a whim and got excited about an opportunity but didn’t do the proper research. These entrepreneurs usually run out of money and close down after a few months.
8. Don’t build around a customer: The best way to make a lot of money quickly is to find a customer who has a problem and is willing to pay you to solve it – and then you go out and build the solution. Most entrepreneurs take the opposite mentality of “if I build it, then will come” only to realize that they’ve built it and nobody is coming. Instead of talking to customers as to why they’re not coming they decided to continue building and building. Soon they find out that they’ve invested years of work and nobody is interested in buying from them.
9. Don’t seek mentors: A great way to get a business going is to find out what other people have done to achieve success and implement those strategies into your own company. Find mentors who have knowledge of your industry and will give you time out of their day to help you.
10. Don’t get involved in the community: Tied in with not seeking mentors is not getting involved in the small business community. Countless opportunities are generated by connecting with other young entrepreneurs and finding out what they are up to and how you can help. You will get new business opportunities, partners, investment, media attention, ideas for productive tools to use, advice for your company, and many other resources that otherwise would take you years of trial and error to figure out (if you ever do at all).
Showing posts with label Starting A Business. Show all posts
Showing posts with label Starting A Business. Show all posts
Thursday, July 12, 2012
Monday, July 9, 2012
Practical Advice For A Small Business Startup
Many new small business owners start on a vision which is great; however that vision truly does not have a plan. A business plan is important to offer a solid foundation for your business model and forethought of expense, income, marketing, etc.
I work with many small business owners and truly not all 'ideas' or 'dreams' are the right fit for that person. One major downfall with many business owners is that they act on impulse and not logistics.
Example... 'Bob' has a relative who is diabetic – he decides to open a store front bakery in a strip center and only utilizes family and friends to help create, build, market and originate ‘goods’. No one is on a payroll – everyone is a volunteer which of course equates to no accountability. The store receives some media attention due to the ‘specialization’ of the store. People come in from the media attention – store becomes busy – no true employees since employees are volunteers / family and Bob is now having a hard time keeping up on orders because he does not have the funds to purchase bakery supplies. Bob is selling as much as he can but he is truly upside down on funds since he has utilized all of his personal funds to get the bakery up and running. Bob realizes that he needs to sell over 5,000 cupcakes to make his rent, insurance payments, vendor payments, etc. Unfortunately, 7 months later, the bakery closes.
This is a true example of not having a solid business plan with a realized budget. Good people with good thoughts however did not have the guidance from a SCORE or SBA counselor to assist them with their business model.
Make sure that you take the time to meet with your proposed landlord to learn about the fine print, make sure you meet with the local village or city to learn more about the demographics of the area, make sure you have disposable income since you will not be ‘making money’ right away, make sure that you have a clear sense of what you wish to have your business look like – stick to your plans – do not let anyone up sell you on your plans.
Enumerating all the mistakes may be productive to a point, but discussing the means to avoid them as a whole is more constructive.
A sound business plan is the best tool for the new enterprise. It is just as much for the business planner as for the investor. Completing the process will convince the most important individual that a viable business vision exists for the enterprise. That individual is you.
When you have completed your business plan, you will be able to pitch it with confidence to people who can help you. It will be your road map to your future that you can slide across the table to a banker, partner or investor. You can address it with verve because you own it by having done it.
The free links below provide free tools and examples on business planning.
How To Write A Business Plan
Sample Business Plans
MicroMentor
I work with many small business owners and truly not all 'ideas' or 'dreams' are the right fit for that person. One major downfall with many business owners is that they act on impulse and not logistics.
Example... 'Bob' has a relative who is diabetic – he decides to open a store front bakery in a strip center and only utilizes family and friends to help create, build, market and originate ‘goods’. No one is on a payroll – everyone is a volunteer which of course equates to no accountability. The store receives some media attention due to the ‘specialization’ of the store. People come in from the media attention – store becomes busy – no true employees since employees are volunteers / family and Bob is now having a hard time keeping up on orders because he does not have the funds to purchase bakery supplies. Bob is selling as much as he can but he is truly upside down on funds since he has utilized all of his personal funds to get the bakery up and running. Bob realizes that he needs to sell over 5,000 cupcakes to make his rent, insurance payments, vendor payments, etc. Unfortunately, 7 months later, the bakery closes.
This is a true example of not having a solid business plan with a realized budget. Good people with good thoughts however did not have the guidance from a SCORE or SBA counselor to assist them with their business model.
Make sure that you take the time to meet with your proposed landlord to learn about the fine print, make sure you meet with the local village or city to learn more about the demographics of the area, make sure you have disposable income since you will not be ‘making money’ right away, make sure that you have a clear sense of what you wish to have your business look like – stick to your plans – do not let anyone up sell you on your plans.
Enumerating all the mistakes may be productive to a point, but discussing the means to avoid them as a whole is more constructive.
A sound business plan is the best tool for the new enterprise. It is just as much for the business planner as for the investor. Completing the process will convince the most important individual that a viable business vision exists for the enterprise. That individual is you.
When you have completed your business plan, you will be able to pitch it with confidence to people who can help you. It will be your road map to your future that you can slide across the table to a banker, partner or investor. You can address it with verve because you own it by having done it.
The free links below provide free tools and examples on business planning.
How To Write A Business Plan
Sample Business Plans
MicroMentor
Subscribe to:
Posts (Atom)