The Top 5 Mistakes Most Start-Up Businesses Will Make
 

I was employed by the Yellow Pages for nearly 25 years as a sales consultant. During that time, I worked with over 3000 businesses and averaged 100 new businesses each year. I got a first-hand look at what the owners planned and implemented. It was an enlightening experience. Although my focus was on marketing, I saw the thinking process of retail and service businesses from an insiders perspective. They were a diverse group of companies; restaurants, dentists, car dealers, plumbers, carpet cleaners and too many to list. But they all had one thing in common. The optimism of entrepreneurship. It’s a wonderful thing. The hope of success and striking it rich. Yet they also lacked some simple elements that I felt would also have led to their success. Today I am retired from consulting, but have begun my own business and hopefully learned from their mistakes. So let me pass them on as a lesson to those who are about to embark on a similar path.

MISTAKE NUMBER ONE: No Business Plan. How can you build a house or car or anything without a drawing or a plan? Where is the foundation? How will the contractor know where to place the windows and doors? Where is the budget for products, services, or marketing? What are the annual projections for sales and expenses? Where do you want to be in one, three, or five years? And yet most businesses have no such plan and therefore are driving forward blindly. Get a clue and have a plan.

MISTAKE NUMBER TWO: Lack of Research. When you decided to sell your product or service, did you research the competition and the marketplace? Did you examine all the other similar items and how they are marketed? Without a detailed knowledge of the other guys and how they operate, how can you be competitive and price yourself properly? Are you filling a need and providing features and benefits that are wanted in the marketing arena? Or are you just hoping someone will buy your stuff because it’s there? Always be researching.

MISTAKE NUMBER THREE: Under-Funding. Have you got enough money to survive the initial start-up and the ongoing bad times? Look at the house-building analogy. When was the last time a house came in cheaper than expected? There are always unforeseen costs associated with business ventures. Look at the expenses; insurance, staff, buildings, utilities, equipment, accounting, legal and other fees, internet, advertising, and taxes. Did you allow just enough for each? Well that’s too little. Where’s the emergency fund for the unexpected costs? If you are serious about survival, you need that extra insurance fund.

MISTAKE NUMBER FOUR: Poor Marketing. This is my area of expertise and it scares me because of the response. When I worked in the Yellow Pages, a new business would tell me that they were going to rely on word-of-mouth for their advertising. Later, after they opened, I would receive a disconnect notice on their phone line. The company had folded. So here’s the hard truth. You have to pay for some type of marketing and keep it in place to constantly attract new customers. Old ones will die, move, or change vendors. Choose several types of promotions, track the results and plan for new ones. Don’t forget that you will always have competition and they would love for you to go away. So market your business.

MISTAKE NUMBER FIVE: No Flexibility. Suppose you decided to vacation in Miami but a hurricane was on it’s way. What would you do? You would probably change plans and go somewhere else. It’s the same with business. You have to be ready to shift directions based on the customers and the evolving marketplace. It may requiring a revamping of products or services to adapt to the varying conditions. Those that can’t alter their course will ultimately fail. The ones that can follow current trends and predict future needs will succeed. But the business must realize it can never stay the same forever. Be ready to change with the times.

There are probably many more mistakes a business can make, but these are the crucial ones that must be addressed. It takes planning and execution to achieve your goals. Many a business person would tell me that so-and-so was lucky to still be in business. I would explain that luck has very little to do with it in the end. Those that have been around a long time worked hard and did their homework. They also offered something of value at a fair price and filled a need. It’s simple and timeless. And it’s yours for the taking if you avoid the five mistakes I’ve listed and keep your focus on the customer, and not the profits. The money will appear if you’ve got everything else right. So good luck and remember, it’s a jungle out there and only the strong will survive.

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