Many of us have often dreamed of starting a business. In a previous post I advocated “following your heart”. If we are passionate and persistent and we combine this with a good dollop of common and business sense, the chances are that we’ll succeed.
But what can go wrong? What are the main mistakes that inexperienced business owners make when embarking on their entrepreneurial dream?
A close friend of mine, consultant Roberto Menéndez, has kindly given me permission to use some of the material from an article he wrote on this topic. Below you will see details of 5 of the most common errors that are generally made:
- Not having a business plan. A business plan is a fundamental tool to set you on your path. Financial and stategic objectives are set within a time frame to help you monitor your progess and to indicate when you are deviating from the plan in time to take corrective action.
- Not having enough money to survive the initial period. A very important question to ask yourself is “For how long can I cover my fixed costs with my current economic resources?” The initial period of a business before sales start to take off can be longer than expected. We need to be realistic about this and plan accordingly, being especially prudent with our day to day expenses.
- Not wanting or knowing how to sell. Even though you have professional experience, it may not be in a sales role. Sales are the life blood of a company. If you feel you don’t possess the skills to sell or are reticent about “doing sales”, get some training or coaching to overcome this obstacle, or employ someone to perform this task as soon as the budget permits.
- Not consulting the professionals. You can’t know everything, especially when it comes to the norms and laws around taxes, employment, licenses and accountancy to name just a few of the areas where we have to be up to date as business owners. It’s fessential to contract the services of professionals in these areas, (unless that is your actual business). Stick to being the expert at what YOU know best, keep focused.
- Confusing the till with your pocket. There is no doubt about it, the money in the till is exactly that, money in the till which belongs to the company and is there to meet its financial needs. Don’t ever be tempted into thinking it’s just money and as you are the sole owner, it is therefore your money. It isn’t. Make sure you account for every penny that comes in and goes out of the business via an accounting system however primitive in the first few months. This will avoid unpleasant surprises later.
Next week I’m going to write about 5 more common errors that many business owners make when starting out and share some personal experiences with you. As I look back over the last 10 years of being with Windsor Idiomas, I can clearly identify where our weak areas were (and are), and where we made our mistakes.
As I’ve mentioned before on more than one occasion, running is a business is one of the greatest learning experiences you could ever have. We never stop growing and developing if we are to ensure the growth and develpopment of our baby, our business.