Establishing a New Business? Avoid these Mistakes!
Q: What are the typical mistakes that new entrepreneurs make?
A: Mistakes are both more prevalent and more dangerous during the start-up phase, (a.k.a. the trial and error phase). Although mistakes are to be expected, they need not be disabling, or adverse. More than a few entrepreneurs have stumbled into success when they discover ways to make money in their business that they didn't know were possible. Not all mistakes are terrible, but there are some mistakes that you can and should avoid while you are establishing your business:
Taking on too much debt
Most entrepreneurs have to take on some debt to fund the dream. That is expected and fine. But you simply must
a) keep that indebtedness to a minimum, and
b) have a plan for paying it back from the get-go.
It will take a while for that new business to begin to generate revenue, and while that happens your debt load will increase due to interest. And the bigger it grows, the more it threatens the lifeblood of your business, your cash flow. Keep your debt low and get out from under it as soon as possible.
Having no marketing plan
Starting a new business is like being alone in a dark room – you know you are there but no one else does. The only way to turn on the light, the only way to get people to know you are out there, is through marketing and advertising. Think you can't afford it? The truth is you can't afford to forgo it! Increased visibility is well worth the price!
Not choosing well
Some people get so excited about a business idea that they don't really stand back and give it the proper, objective analysis they should, and then they are surprised that the rent at their store in the mall makes turning a profit quite challenging, or that this franchisor is hard to work with. Other examples of not choosing well include: Partners: Before going into business with someone, do a project or two together. Are your styles compatible? See if you think about money & growth the same way.
A contract with a bad vendor can doom your business. Bad location: It could be too expensive, or maybe it is too off the beaten path.
Not having a great team
There are 20 million businesses in this country that are one-person endeavors – solo practitioners, freelancers, independent contractors and so on. That is all well and good, but it still does not mean that you have to be totally on your own, and you shouldn't be. Ultra independence comes with a few drawbacks, one of which is that there's no-one else to bounce ideas off of and/or "get their hands dirty".
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