I got some great feedback from my last blog post, so I thought I would kick 2019 off in the say way i finished 2018… Here are some more tips from my own journey and those of friends, I hope they will be of help/ use in your own business journey.
On average, it is said that it takes two years to build a business. It is rarely something that happens overnight and it is not uncommon that newly started businesses fail. Here are some common mistakes entrepreneurs will make.
Not setting aside enough cash reserves to support yourself. Many entrepreneurs run out of money to support the business and/or themselves before the business is profitable enough to sustain itself. Make sure to plan for how you will survive while building your business.
Using assumptions that are overly optimistic during planning. Your idea might be great and you might be convinced that success will be immediate. Remember to consider all details carefully and don’t be overly optimistic – as in, don’t let your survival be dependent on everything happening exactly as and when you would like it to happen. Be honest with yourself. Are you underestimating the time required to get the first client? Are you overestimating the demand for the product? Are you assuming zero risk by not allowing for what could go wrong? Get feedback from outside people about your idea, your business plan and your product.
Not properly evaluating the business model. Not everyone incorporates a business model into their planning. Put pen to paper to help you objectively evaluate your overall business model and its profit potential. Having a great idea is just a start – it doesn’t necessarily translate into a profitable model.
Trying to do everything yourself to save money. You cannot do everything yourself. Your time is money. Think about where you must personally invest your energies. Should you be developing and refining your content, products and services, cultivating relationships with key clients and stakeholders, developing credibility within your industry? No one can do this for you, but others can develop your website, handle your public relations, develop templates for your newsletters, make trips to printers and copiers and perform random administrative functions. Make sure to include in your plans what you need to do and what you can hand over to others. It will affect both time and money in the business.
Not being willing to work like a dog during the early days. Entrepreneurship is seldom glamorous and even more seldom glamorous from the start. You don’t just get to the top and skip all the hard work. The simple truth is if you want to make it, most startup businesses have to hustle early on. This might mean working another job while you’re starting your business, volunteering or doing some work for free to gain experience and exposure. It also may mean working nights and weekends.
Pricing your product or services too low or high. This is a tough one. In some business areas, coming in at a lower price is a way to get into the market, in other cases, this might raise questions on how serious a business you are. Learn about your market – both potential clients and customer and the competition. Understand where your product will come in and make calculations from there. Keep in mind both a worse case and best case scenario. Can you price differently depending on client, season or point of sales?
Not having a growth strategy. While most small businesses think the goal is to win as much business as they can, this isn’t necessarily true. Sometimes, you can attract too much business and then have a completely different challenge that could threaten the longer term viability of the business completely. We all know of a restaurant that was great when it first opened, but after expanding the food or service went downhill. They then got a bad reputation and eventually closed. Avoid that scenario and plan for how to grow.