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 Small Business Startup. Show all posts
Showing posts with label Small Business Startup. Show all posts
Thursday, July 12, 2012
Thursday, July 5, 2012
Tips For Avoiding Failure As A Start-Up Small Business
Most small businesses fail within the first few years. That's just a cold hard fact. To avoid being one of them here's some tips to consider....
Many emerging entrepreneurs make the mistake of not being specific enough in choosing a target market. They think they'll be turning away potential customers if their services are not broad enough. This also means that their vision in marketing is too broad and clouded. Lacking a specialty can come off as a lack of commitment or lack of expertise in any given service offered. You don't want to be a jack of all trades, master of none.
Once "positioning" has been determined, I found that many people make the mistake of taking on every client and opportunity that comes their way. Instead, they should be focusing on clients that they will be happy working with, fit well with the expertise they can offer, and actually appreciate what is being offered. The mistake is that they end up dealing with clients that take up all their time and do not help them grow. The focus should be on serving clients that you really want.
Also, when branding and positioning their new business, instead of trying to compete head-on with others on price and/or services, they should try to build a niche in their market and in that way not compete directly with others. Try to be the best in one area instead of being good in a lot of areas.
I think it's irresponsible to tell new entrepreneurs to do what they love and they can make a business. No, not everyone can be an entrepreneur or business owner (which are two different things). A lot of people have skill and passion but lack the technical skills to run a business. Not everyone has access to incubator programs, MBA programs or consultants, so it keeps them from getting properly educated.
The other thing I would say is that people lack confidence and are risk averse. To be an entrepreneur you have to be willing to take risks and be confident in your product/service. Before anyone launches, they should be researching their market (and no, no just reading about it, but getting out there and talking to your demographic). Once you understand where the needs are, who the customer is, and how much they're willing to pay for your solution, then you can start building a company from there. It won't be perfect out the gate, but you'll have an idea of how to build your foundation. You can learn the rest of the skills along the way, or hire your weaknesses.
Too many people start businesses without a clear set of objectives that they can measure over time. This is like shooting a bow and arrow without a target. How do you know if you are successful if you have no target?
Many emerging entrepreneurs make the mistake of not being specific enough in choosing a target market. They think they'll be turning away potential customers if their services are not broad enough. This also means that their vision in marketing is too broad and clouded. Lacking a specialty can come off as a lack of commitment or lack of expertise in any given service offered. You don't want to be a jack of all trades, master of none.
Once "positioning" has been determined, I found that many people make the mistake of taking on every client and opportunity that comes their way. Instead, they should be focusing on clients that they will be happy working with, fit well with the expertise they can offer, and actually appreciate what is being offered. The mistake is that they end up dealing with clients that take up all their time and do not help them grow. The focus should be on serving clients that you really want.
Also, when branding and positioning their new business, instead of trying to compete head-on with others on price and/or services, they should try to build a niche in their market and in that way not compete directly with others. Try to be the best in one area instead of being good in a lot of areas.
I think it's irresponsible to tell new entrepreneurs to do what they love and they can make a business. No, not everyone can be an entrepreneur or business owner (which are two different things). A lot of people have skill and passion but lack the technical skills to run a business. Not everyone has access to incubator programs, MBA programs or consultants, so it keeps them from getting properly educated.
The other thing I would say is that people lack confidence and are risk averse. To be an entrepreneur you have to be willing to take risks and be confident in your product/service. Before anyone launches, they should be researching their market (and no, no just reading about it, but getting out there and talking to your demographic). Once you understand where the needs are, who the customer is, and how much they're willing to pay for your solution, then you can start building a company from there. It won't be perfect out the gate, but you'll have an idea of how to build your foundation. You can learn the rest of the skills along the way, or hire your weaknesses.
Too many people start businesses without a clear set of objectives that they can measure over time. This is like shooting a bow and arrow without a target. How do you know if you are successful if you have no target?
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