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ST-13
Ten Mistakes SCORE
Chapter 570 |
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TEN MISTAKES THAT A SMALL BUSINESS MUST TRY TO AVOID |
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Since one mistake is usually enough
to bring down a small business, do your best to avoid these ten mistakes. 1. Start a business with partners and associates with no formal written business agreements It
doesn’t take long for disagreements to develop and the fighting to
begin. Why? There are no stated limits of authority,
and each person acts for him/herself and not for the benefit of the business. 2. Failure to have a formal business plan Too
many people are in a hurry to get started and see things such as planning,
research and marketing as an unnecessary waste of time......... Success is in the details. 3. Insufficient financial support Many
lenders won’t loan money if the prospective borrower has a poor credit
history. Before going into business,
get your personal financial house in order. 4. Failure to consider competition When
competition is ignored, a business is usually doomed. By the time a competitor is recognized, it
is likely too late. The new business
is forced to compete and often resorts to cutting price. This is the worst thing to do. By cutting price, the business must endure
competition and do it with a lower profit margin. Successful businesses know the competition,
make themselves different, and deliver more value. 5. Use do-it-yourself legal and accounting help Why a
person is willing to gamble all his or her assets on a business and not spend
a few hundred dollars to get competent professional advice is beyond
reason. If bankruptcy occurs, the
lawyer and accountant will
have to be paid anyway. Pay
them first. It’s cheaper. 6. No experience In
every profession, there is an internship that must be served to succeed. Getting the experience is easy. All you have to do is work for some who has
a similar business. Want to start a
bed-and breakfast? Go work for one for
a few months and learn the real-world problems. Working at an establishment is really a
paid tuition program that will help ensure success. While you are working and learning, keep a
journal of everything you experience each day and begin building your
business plan as a result. 7. Hire the Wrong people Again, an entrepreneur will gamble the firm
on a business idea and give no thought to the type employees to hire. And worse, often the employees who are
hired are not supervised. Remember
customers judge a business by the employees. Customers cost too much to lose even one. 8. Wrong location Everything
from visibility to traffic problems must be studied. If phone and the Internet are used to
secure sales, the buyers must be able to locate the business number and
address. People won’t spend much
time looking. The
message....... Be easy to find. 9. Start a business where there is little demand Just
because an entrepreneur wants to have a business doesn’t mean people want
to support it. You like to invent
gadgets? That doesn’t translate
into sales. People have to want the
product you make. 10. A dislike of sales If
you are in business, you are selling something. A person opening a shop and simply sitting at
the cash register waiting to ring up the purchases won’t work. Customer interaction, service, assistance
is all needed. That is sales. (Taken from the April 7, 1999, |
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