Part Time CFO Inc.

Seven Common Business Mistakes to Avoid in a Business Start-up

You are not alone!  It’s not unusual to be concerned about business mistakes in  starting a new business. After all, there is a lot of talk about the rate of new business failures in Canada.  However, just because some fail, doesn’t mean you need to.  Here is a checklist of ideas to help you protect yourself and your investment of time and money.

Don’t worry about failing.

Not every decision you make will be correct but the ability to monitor those decisions and react fast to change the ones that are not working is the key to eventual success. Make sure you know the assumptions that have gone into those decisions and learn from those mini-setbacks. It’s a well known fact  that entrepreneurs learn more from their failures than their successes.

Failing to plan

If you fail to plan, you are planning on failing. An idea is not a business plan, a marketing plan, or even just a goal. It is simply an idea. Although the planning and researching process may take a while, it will benefit you and give you a better chance of success. If something in your plan doesn’t fit just right, change it. Your business plan will never have a final draft.

Make your plan from reasonable assumptions and expectations

Keep your revenue projections reasonable with no Hockey Stick sales forecast. Make sure that each revenue category is supported by assumptions that can be easily monitored. i.e. restaurant revenue supported by daily sales forecasts built up from number of daily customers and average sale per customer. Steps can then be taken daily if these numbers are not hit. You don’t have to wait until the monthly financials are prepared.

Keep your costs and capital expenditures under control. Cash is king and is at a premium in the first year of business operation. Be realistic about the expenditures that are necessary coming out of the gate.

Hiring of staff

Hire the people with the skill set that you need, not the people that you like.
As tempting as it may be to staff your new business with friends and relatives, this is likely to be a serious mistake. Hire a core team of smart people who already know the industry and its inherent risks. Take full advantage of the talent pool you’ve created and when a problem comes up, remember that nobody has all the answers, including you.
One of your goals should be to find a manager who truly shares your vision, and to whom you can someday confidently hand the reins so that you can carry out the next step. Hire people that don’t always agree with your ideas. Be quick to fire and slow to hire.

Focus on your target

New entrepreneurs are pulled in a variety of directions at the start but to be a success, you have to follow the plan you put together and stay focused on those goals. Your goals should be clearly defined with strategies to accomplish and deadlines to hit. Also, don’t bite off more than you can chew. Keep the objectives  and goals at a manageable level. If there are too many goals you will lose that focus.  Be flexible, because just as lack of planning can be a problem, adhering blindly to your plan, without minor revisions along the way,  is a sure fire way to steer your company off a cliff. A successful entrepreneur will constantly adjust course without losing sight of the final destination.

Recognize your own talents and weaknesses

You may make a successful start-up entrepreneur,  a visionary but not be suited for managing a business once it hits a certain number in sales or employees. Recognize where your talents lie and make sure that you have the proper people in place to promote once that expertise is needed or those thresholds are reached.

Marketing.. Marketing.. Marketing … ad nauseam

Your business stopped marketing. This is probably the biggest mistake for a business start-up. The key to marketing is repetition. Make sure people think of your name for the solution to the problem they have. If they have only seen your name once, but your competitor just sent them a third flyer, your competitor will get their business. We’ve all heard that it takes more than one impression for a customer to buy, and it has never been more true. With the information available to your customers today, you want your name to be in front of them as much as possible. Use low cost or free Social Media to get in front of them regularly

The bottom line with a business start-up is to stay motivated. Starting a business is one of the hardest things anyone can ever do because of the uncertainty, the lack of a support structure, the complete and total disregard of your typical safety zone. It is all part of starting a business. But the rewards are far greater than the sacrifices. And in the end, when you are financially secure, and independent from the corporate world, it will be more gratifying than you could have ever dreamed.

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