The curve showing the decrease in income will make a beginner feel discouraged business, especially if they occur in the first year. Know that there will always be like that. However, in order not to lose badly, know common mistakes that occur.
Here are 7 most common mistakes that beginners do businessman and a few suggestions to avoid such errors from Joana L Krotz, author of Microsoft Small Business Kit:
1. Short on the map
Always echoed to entrepreneurs who want to start a business to fill up with fuel “passion / passion” so that no quitter. But honestly, you do not just need fuel to move it, you need a plan!
Take the time to investigate the market and target customers, competition, and other things. Focus on answering the question: “How do you generate revenue from this venture?”
Take the case; you open a DVD rental store because the location is somewhat cornered, you concentrate to be seen by others. Trying to enliven the exterior and interior decoration to be seen. Your capital was sucked into it. As a result, the films you have not had a good inventory. As a result, customers who have managed to get in, get out with disappointment, you did not manage to get revenue. The lesson to be drawn is careful planning from the beginning and focus. Do not act desperate if there is no clear planning.
2. Selling below market price
“Many entrepreneurs assess the goods or have put the price too low,” said Linda Hollander, author of Bags to Riches. That is, this will make them always worrying about money. Every time they get the order, no sense of fun, because the price is set too low and no benefits.
Prior to the price lists, do calculations. Calculate the fixed expenses and expenses at any time. Perform market research and competitor price value. Calculate the margin you need to get the required benefits.
3. Starting a business just to try it
Most entrepreneurs only see the big picture; type of visionary, risk taker, challenge seeker. Increasingly faced with the challenge, the more excited they are. Not infrequently, this type of looking for trouble so I can find a challenge and feel more energized.
“Entrepreneur who feel bored is one of the murder weapon hidden in a small company that looks healthy,” said Ralph Warner, author of How to Run a Thriving Business. The purpose of running a business is to print money. Do not try to take risks just to get the excitement. You endanger the entire company and the people in it.
4. Not the slightest understanding of marketing
Rarely do people who are just starting to plan or prepare a budget for marketing. Generally, these new business owners think that marketing is an unnecessary expenditure.
“Marketing should think about future sales. While sales have to think about how many sales that happened today,” explained Rob Gelphman, who runs a marketing communications firm in San Jose, California. The basic problem is the lack of experience regarding sales cycle process. Beginners usually businesses to hire more sales people first. Ideally, hire someone who can help plan the project and develop a step forward, just sent salesmen to sell.
5. Bosses are not the same as friend
At the beginning of opening the business, everyone seems to work 3-4 office at once. Seems no need to worry about workflow management. “When starting a business, the process was created by accident,” said Jay Arthur, author of Six Sigma Simplified Training. Settlement problems usually occur using reason and feeling alone. The company evolved through trial and error. However, at some point, the ability to solve complicated problems start is required. Because there are no standard operating procedure, and the work load was not balanced, over time it is difficult for employees to work in a place like that. What can be done is to take a stand and make certain procedures to solve problems, or appoint subordinates to execute it.
Create a manual of rules that defines the division of labor, about the dismissal, staffing, appraisal, leave, compensation, promotions, and more.
6. Capital spending
Most new business owners about their financial planning needs. Generally, the new owners spend money on items that are less needed, such as furniture, technology and office goods, or employ too many experts or executives than is needed. Keep in mind also that there are rarely customers who pay obligations on time. So, even though sales managed to close the deal, the payments could have happened later. It would be better if you have an accountant who can perform the analysis.
7. Forget to loved ones
Beginners takes 80-100 hours per week to work on building his company. They will need someone who can push them. “It is needed a partner that has the time, commitment, patience, and willing to sacrifice income in order to be lasting relationship,” explains Victor Sim, a lawyer at Squire, Sanders & Dempsey.
You must commit to keep watching them as well. Do not let the launch of your company actually hurt the people you care about.
Comments are closed.