A large number of people who start their own business do not realise how much work and time will be involved. They fail to carry out any primary research and as a result become quickly overwhelmed.
Perhaps the first question to ask yourself then is whether you are in fact ready to start your own business. Do you have an entrepreneurial mindset? Are you committed to spend all the time you need to succeed? And are you ready to take massive action?
At first, you will have to wear many different hats; you will be the CEO, the general manager, the accountant, the salesperson, the computer technician, the secretary, the receptionist. You must therefore prepare yourself because there will be days when you are disappointed, depressed, or frustrated. You have to realise that success will not happen overnight. And it may take a year or two before you achieve your expected results.
To avoid these disappointments, here are ‘The 12 Most Common Mistakes New Entrepreneurs Make & How to Avoid Them’:
Mistake # 1 – Failure to spend enough time researching the business idea to see if it’s viable:
Numbers of new entrepreneurs have often failed because they were not truly interested in the business; they were more interested in making money. It is important to start something that you really like, because you will be spending a lot of time on it.
Your assignment – Spend all the time you need working on your business plan, which should include: your mission statement, your business strategy, research on your target market (demographics), industry analysis (size, economics, trends, success factors, challenges, etc.), your marketing plan, your financial projections and sales. – Email us on admin.aldertonfinancial.com if you need some help setting this up.
Mistake # 2 – Failure to determine whether the business actually adds value:
The most sustainable businesses, those that withstand the test of time, provide value by performing a service that people need.
Your assignment – Make sure your products or services provide value and benefit to your clients. Be ready to solve any business problems that your clients may have.
Mistake # 3 – Failure to gain a complete and total understanding of the business:
Every business has drivers; hot buttons and key levers. What drivers exist in your business?
Many business leaders, executives and management consultants would say that success largely depends on attention to detail.
Your assignment – Understand all the aspects of your business, and of particular importance, know how to present them in an easy and simple manner.
Mistake # 4 – Failure to describe the business in only one or two sentences:
No doubt you’ve experienced the entrepreneur whose business is so technical or complex that he cannot explain the concept in plain English. Or, it takes 20 minutes to convey the purpose of the business. What value or benefits does your business offer?
Your assignment – Have an efficient 15 to 60 second elevator pitch that introduces you, your business’ mission, focuses on the benefits you provide and makes you and your business memorable.
Mistake # 5 – Failure to conduct the primary research:
There are many great ideas you can latch on to, but the key in business is to make sure the idea—the central theme or mission of your business venture—can attract customers and generate sales and profits. A great idea in and of itself is not enough to start a business.
Your assignment – Take the time to gain experience, study the business, understand what makes the business work (how to serve the customers and generate profits) and what leads to losses.
Mistake # 6 – Failure to contact professionals who can help you get started:
Numbers of new entrepreneurs ask their friends and family for advice when starting a new business. The problem is that they often ask people who have never started a business; so in reality, these people are not in a position to offer sound advice.
Your assignment – Get a mentor or two. Surround yourself with experts who possess skills and expertise that you lack. Team up with professionals who can complement your strengths and cover for your weaknesses. – For advice on Business Growth, Business Strategy or Financials email us on admin.aldertonfinancial.com
Mistake # 7 – Failure by underestimating financial requirements:
Do you know how much capital you need to start your business? Do you know the market, did you calculate your cost, did you project your sales, do you know the number of clients you need? Do you know how long it will take before you get your first benefits or before you will run out of money?
Your assignment – Invest the time to work on ALL aspects, especially the major ones, of your business before you start.
Mistake # 8 – Failure to make marketing a priority:
Many new entrepreneurs start their business without determining their target, niche and demography first and as a result have failed to attract any clients. Marketing should be one of your top priorities. Devising a marketing plan will help you determine how to promote your products or services and create a system that will generate more clients for your business.
Your assignment – Dedicate a good portion of your time and energy to working on and implementing your marketing plan. Set up a meeting with yourself once a week to work on your marketing plan and whatever happens never cancel this meeting; it is essential for your business.
Mistake # 9 – Failure by under-budgeting the marketing costs:
Today the world is overcrowded with businesses and probably a number of those in your market perform essentially the same functions as you do. This means that you have to differentiate yourself from them by making your business stand out. Publicity is essential to your livelihood; otherwise you will not attract any customers.
Your assignment – Make sure you have a strategy that puts the word out there. Provide adequate publicity, business cards and marketing materials that project a professional image. Don’t try to save money on these; they are reflecting your business. A cheap business card or flyer will not make a professional impact.
Mistake # 10 – Failure to focus on the business:
Many new entrepreneurs are energetic and enthusiastic people (which is essential to success), but they can also be overly optimistic and pursue too many targets and directions at once. This typically results in mediocre results. Define your business’ mission as succinctly and narrowly as possible. When you move in too many directions at once, especially in the early days of your business, you are likely to fail to execute anything correctly; so you end up working “on the business” instead of “in the business.” In other words, you will spend all your time operating each task on your own. You won’t have the time to sit back, and decide on the best way to develop your own marketing plan, create new products, or improve your services.
Your assignment – Know you goals. Put them in writing. Make sure they are realistic, specific and measurable and that you set yourself a deadline to achieve them.
Mistake # 11 – Failure by over-marketing
Once you have developed your product or service and have perfected your offering, you may think that your offering is the best in your marketplace. But unfortunately, to be efficient you can’t sell to everyone. You need to select a specific target market and stick to it. By doing this you will have a more efficient message and will more likely achieve success much sooner.
Your assignment – Carefully determine your niche, your demography, your ideal clients, where they go, what they read, what their hobbies are, etc. Once you have a full understanding of your client’s profile you will then have a full understanding of how and where to find more of them.
Mistake # 12 – Failure to follow-up with clients
Many new entrepreneurs are often so desperate to constantly find new clients that they neglect the clients they already have and in fact end up losing business. Statistics show that it takes seven more interactions to secure a new client than to sell more to a repeated client. So develop and maintain a useful and organized follow-up system to offer new services to your clients and don’t let them slip away.
Your assignment – Constantly and consistently communicate with your current clients.
Start a newsletter, offer special sales, create new products to upsell, join affiliate programs if you don’t have your own products. People who have already bought from you will appreciate it when you recommend other products. Statistics show that up to one out of three clients will take advantage of this new offer. It is essential to build a very, very special relationship with your clients. They are your best audience.
By implementing these actions you will save you time and lot of money!
We help Entrepreneurs with all the above to grow successful businesses and make sure they’re making the next best move.
Scotch O Clock ft Mike & Nathan Karnovsky from Satchmo Cafe on How To Build, Grow & Maintain a Business
This week we we’re joined on Scotch O Clock with Mike and Nathan Karnovsky from Satchmo Cafe.
Mike and Nathan are owners of the successful well known Satchmo Cafe on Fitzgerald Street, North Perth.
If you haven’t visited yet we definitely recommend!
Featured Whiskey: The Yamazaki Single Malt
Business Topic Covered: How To Build, Grow & Maintain a Business in Tough economic Times.
Scotch O Clock Episode 45:
Whiskey Tasting: 0:43
Guest Intro: 1:12
Point of Difference in Business with creating a client friendly atmosphere: 1:57
Building a Business in tough economic times: 7:45
Seeking a customer advisor in business: 8:40
Making changes in Business to adapt: 9:20
Evolution of Business: 10:20
Technology in Business: 22.58
Start up Businesses: 25:00
Mike Karnovsky advice on starting and maintaining a business: 27:35
Do your Homework before setting up your business: 32:15
Respect your customers: 34:50
Advice in Business: 35:00
Scotch O Clock Summary: 35:45
We Hope you enjoy this Episode guys and remember to please comment and share this video to help those in business.
Some would say that big business has it made; I on the other hand believe that there will always be a special place for the little business guy. Entrepreneurs have an edge over their bigger competitors. So while the Amazon’s of the world are struggling to break even from their multi billion-dollar overheads, the smaller Dot coms are already realizing profits. What advantages do the “little” guys have in the marketplace? Below is how to “think like a startup” and realize greater success.
HOW TO KEEP THE ENTREPRENEURIAL EDGE:
1) STAY IN TOUCH WITH YOUR CUSTOMERS
Ever heard of the 80/20 rule? The old adage says that 80% of your business will come from 20% of your customers. In business, the customer is king. It’s far easier to sell to an existing customer than to find a new one. So, once you get a customer, you need to service the heck out of them.
So how do you make your customers feel like they are number one? By letting them know that they are top priority. This means answering your own phone, replying quickly to email requests. It means staying in regular communication with your customers. Keep up a good rapport. Send an occasional email asking them what’s new. Mail birthday cards or a customer anniversary card. Gestures like these can build close, long lasting customer relations and goes a long way to building customer loyalty.
In addition to building stronger customer relationships, keeping in touch with your customer base can enable dot coms to offer one to one marketing. By identifying your customers needs and buying habits, you can personalise product packages and service offerings to meet your customer’s individual needs.
2) LISTEN TO THE BEAT OF THE STREET
If small business owners want to keep their head above water, they need to closely monitor their environments. By “listening” to the pulse, you can think proactively rather than re actively. This means spotting things when they are coming so you can act quickly and take advantage.
Web stats – Do you look at your web stats regularly? Or are you guilty of being too “busy” to make time? Unless you regularly look at your web traffic reports, they probably will read like a foreign language to you. By looking at your web reports regularly, you’ll be able to spot trends. What pages are your visitors going to? What is the hits-to-sales ratio? What can you do to improve that number?
Feedback – Another way to “listen to the beat” is to get feedback from your customers. Try to be on a first name basis with your customers. Ask them how they are doing and if there is anything you could assist them with. The answers you’ll receive will be worth their weight in gold.
Industry news – Keep up with the industry by reading everything you can get your hands on. When you work in “living room central” it’s easy to let yourself be isolated from the world. You can’t rely on your favourite soap operas to keep you informed about the current trends in business. So put down your munchies and flavoured coffee and make a concerted effort to stay “in the know” by subscribing to print magazines and online newsletters
When I think about flexibility, the childhood rhyme “Jack be nimble, Jack be quick, Jack jump over the candlestick” comes to mind. In order to keep from being burned, small businesses need to be nimble and quick. This means having the flexibility to act quickly in response to changes in the marketplace. Like a surfer riding a wave, you have to be in just the right place at the right time to ride the crest of the wave and get the best ride. Likewise, if small businesses monitor closely what’s going on in the marketplace, they can act quickly to take advantage of current events and trends in the marketplace.
They say what gets measured, gets managed. Keep a close eye on your monthly financials. Listen to your customers. Measure the effectiveness of your advertising. Then when you see a difference ask yourself, “was that good or bad” and ACT!
4) TAP INTO THE FIRE AND LET IT FUEL YOU
Simply said, small business owners want it more. Because of this, they will try harder and go the extra mile. That’s why big companies like Wal-Mart and Saturn have made their employees part owners in the company. They have seen that people will work harder for themselves than for anyone else.
The best secret to success as an entrepreneur is to find something you are passionate about and create a business around that. When you do something you love you’ll never “work” a day in your life. Entrepreneurs have that fire in their belly. Find a way to tap into that internal fire and let it fuel you to success.
While big companies will often be able to offer the lower prices, small businesses will always be able to pile on the value. By offering better service, adding bonuses, giving and discounts on related products, the entrepreneurs can add more bang for the buck.
6) CREATIVE SPARK
What’s great about the entrepreneurs is that they aren’t afraid to try something new. When I think of “creative spark”, I think of my son, when he was three years old, eyeing a package of cookies up on top of the refrigerator. He doesn’t know that it is up really high and that climbing up there is dangerous. He only sees the cookies and starts stacking chairs and climbing until I find him sitting on top of the fridge with a big smile and a mushy cookie face. Similarly, entrepreneurs don’t “know” if something will work or not and fearlessly forge forward with their eyes on the prize. This innovation helps them to tap into new products, techniques, and processes.
They say, when the going gets tough, the tough gets going. When the market starts putting the heat on your business, ask yourself, are you staying “sharp”? Do you still have the entrepreneurial edge? By thinking like a start up, you will find that you will have the staying power to compete with the big boys on the block. And you’ll find that kind of hard-earned success is “oh” so sweet!
This week we we’re joined on Scotch O Clock with Chad Barnier discussing Personal Branding.
In this episode we talk all about Personal Branding in Business and How it can help you in your business.
Featured Whiskey: ArdBeg 10 year old Single Malt
Business Topic Covered: Personal Branding
Scotch O Clock Episode 44:
Whiskey Tasting: 0:20
Topic Intro: Personal Branding 1:30
Chad Barnier discussing Personal Branding in Business: 2:27
Why Your Personal Brand doesn’t get a day off; being inauthentic: 4:40
Why people in professional service industries need personal branding: 8:02
The “Mere Exposure Effect”: 12:00
Scotch O Clock Summary: 14:30
For more information on how we can help you in your business click on the Green Button Below.
Here’s an interesting notion: Do you realize that there are mistakes you can make at various stages of your business’ growth that can be slowly killing it for months or even years if you don’t watch for them?
Well, these mistakes do exist and they are not just reserved for the rookie companies. Many working businesses, including those you might think are “successful” because they’ve been around for 10+ years, are often still making them… and are possibly losing a lot of money and/or wasting a lot of time in the process.
Although some of these big and sneaky mistakes seem aimed more at service type companies, they really do fit the bill for almost any type of industry. I’ve done my best with the listings below to give examples to prove it.
Underestimating Project/Service Time– This is a big one and it pertains to service companies as well as companies that sell a product. This is a service company’s bread and butter. If you don’t estimate your time to perform each and every service in your repertoire, you will get burned and there is little you can do about it but bite the bullet and learn from it. The best way to estimate time is to do it once yourself or watch your best employee do the task and then throw in a little fudge factor on top of it. For product companies, time becomes an issue with logistics so be aware!
Not Knowing YOUR Company Numbers/Incorrectly Setting Prices– Notice I emphasised the word “your”. It’s a common mistake to use a competitor’s as your pricing gauge without actually knowing why they use those numbers. Think about the nightmare you will get yourself into if you take a competitor’s price, cut it by 10% and then start selling. What if the competition has a bad pricing structure and is barely making money or even losing money?!?! What if your costs are more than theirs?!?! You can use competitor as a starting point but you can’t base your whole strategy on it.
Different industries have their own variables as far as costs go and you need to be aware of them for your project or product pricing. What you pay for a product you are going to sell is not the only cost to have in your head when you are pricing products. How much your labour and materials cost for a service is only a piece of an hourly rate. Employees cost more than just salary and not every employee is part of your labour cost. Every company has insurance to pay for. There are tons of overhead expenditures that need to be part of your price. Oh, by the way, the big one that many people forget about in their price is the quality factor. What you include as “standard services” or “standard product features” as well as job site etiquette or in store service or warranties all need to go into your pricing. I’ll get to more on why in the next segment.
Not Charging for All of Your Time & Costs– This seems like a stupid statement to some but I bet most business owners will admit that they have given away a little too much of the farm at times. Hey, there is nothing wrong with giving a little extra here and there to show you care. But either way, that’s not what I’m talking about here. What concerns me are those that put a lot of quality into their work or products or stores and do not cover the cost for it. As an example, say you run a service company and your competitors don’t do a certain standard service that you do. You can’t just undercut their price to steal a job; you need to have that cost covered in your rate and advertise the fact that it comes with the price upfront. Stores undermine themselves, for example, when they put more people on the floor for customer service but don’t charge for it. These things cost you money and when your competitors don’t do them it costs them less money. Put out better service and then under price them, and your competition just has to wait a little bit for you to fall on your face so they can swoop back in.
As a business owner you need to believe that you are providing your clients worthwhile wares that deserve to be paid for. If you get the chance to explain why your prices are higher, then take that opportunity and do it. If they don’t like the fact that you include things that others charge extra for later or that you treat them better, then they are most likely completely price shoppers. You don’t want them as regular customers anyway. Trust me.
Not Getting Paid Fast Enough– That’s right, the old cash flow issue. As long as you are actually making enough money to pay the bills, this problem can be solved, prevented or at least made to be not as bad as it could be. Here’s the deal:
First off all, bill customers very promptly. It is very common for a small business to not have the procedures or systems in place to get invoices generated and out the door in a timely fashion (see the next segment for more). Again, this would seem unlikely since that’s the reason why we are doing the work- to get paid. But it is very easy for the people responsible for getting this info to the billing people to be too busy to get it there or not have enough organisation to give it to them the right way.
The second part to slowing down or stopping a regular cash flow crunch is to make the quickest payment deals possible with customers and the slowest possible with vendors and employees. If there is any way not to pay employees any more than twice a month, you better do it. Contractors always have an issue with this. If you must pay weekly, then tell them before they are hired that they will be getting the first week held back, essentially buying you a week. It will help, I promise.
Part three involves credit. If your company can get a credit card, then get it. This allows for certain important things to be bought (that you can afford) that might come up during a cash flow crunch. Better yet, especially if you have no choice but to deal with 45+ day customer payments, do your best to get a company line of credit. This is a must if you plan on selling to the government or doing commercial service work. These clients often have 60 to 90 day wait periods.
Failure to Have Solid Systems and Procedures in Place– Too many procedures (known as “red tape”) is the reason why many people start their own business in the first place. Unfortunately, having no procedures and systems in place at all is not an alternative. Depending on the type of industry, business owners must come to a happy medium or chaos and the unknown will ensue. Some basic examples where procedures or systems are needed include billing, collections, payroll, hr (interviewing, hiring, vacations, benefits, job responsibilities, etc.), manufacturing, operating equipment, maintaining equipment, inventory, sales calls/visits and logistics to name a few.
Even a one person show needs to have some admin procedures in place. This will make it easier to hire temps and subcontractors and control what they are doing for you. Without at least a watered down version of a system or procedure to do everyday work, you will be to blame for causing many major headaches as your company grows. I can’t emphasise how important this is for when you bring on new employees. I’m sure you heard this before, but I am also a big proponent of having an employee handbook even for one employee. It’s amazing the trouble people can cause business owners just because they allow you to pay them.
Spending Advertising Money Just to Say You Advertise– I would almost rather see my clients not advertise then to spend without regard to tracking the results. There is no point in a marketing campaign if you do not put things in place that allow you to measure how well the plan is working. The other wasteful part of marketing that many people make the mistake of doing, is not tracking their previously successful campaigns. Why some people think that just because a $400 dollar a month ad worked once very well for one busy season, that it will automatically work every year after that is beyond me.
Spreading Yourself Too Thin– This is a classic mistake made by every entrepreneur. The key is to figure out when you are at that “wearing too many hats” point and start getting some help. The solution here is to know your strengths and to be able see when you are not performing the duties that demand these skills. If you are the best sales person on the company, you can’t get caught up in day-to-day operations. If you do, sales will slip and eventually you won’t have any operations to worry about. Think about this to help you figure out if you are spread too thin: Did you really go into business for yourself to work 80+ hours a week?
Not Getting Help Soon Enough– Set goals to know when to hire people to take over where you are light on knowledge. Not getting help or waiting too long can kill a company. Most people who start a business do it because they are good at the technical end or the sales end. If you know the best way to make a widget, then your strength is in production and that is where your time should be spent. Hire an outside company or consultant to take care of the sales and marketing and then hire inside when you can afford someone full time. Don’t be something to your company that you are not. It will only hold you back.
The three big issues people like to tackle themselves but usually are least knowledgeable about are legal issues, accounting/bookkeeping issues and daily operations issues. The odds are that these three things are your weakest link so if you don’t have a partner that has the background for these subjects, then be prepared to get help as soon as possible. It’s preferable that you do this before you start a business.
Although looking for these problems at any time is a good idea, the end of a year or season is an excellent business interval to make sure you are not making these errors. Take the time, or make the time, to fix these problems. If you don’t know how to reverse the problems, then get some help. If you really don’t have enough time to either figure out if you have these issues or know they are there and can’t break away long enough to do it right, then get some help.
This week we we’re joined on Scotch O Clock by Sunny Naran from Woodvale Newsagency.
Sunny has been running his newly business for just under a year and knows the importance of customer service in business so I knew it would be great to discuss this topic with him in more detail.
Featured Whiskey: Tripple Distilled Auchentshan Single Malt. American Oak.
Business Topic Covered: Customer Service.
Scotch O Clock Episode 43:
Guest Intro of Sunny Naran from Woodvale Newsagency: 1:03
Topic Intro: Customer Service: 1:20
Whiskey Tasting: 1:38
Customer Service in Business: 3:15
Chris discusses Customer Service & Recognition in Business: 3:57
Frank discusses Customer Service: 6:12
Future Plans for new businesses: 10:08
Capitalising in business: 12:02
Scotch O Clock Summary: 16:18
We Hope you enjoy this Episode guys and remember to please comment and share this video to help those in business.
For more information on how we can help you in your business click on the Green Button Below.