America, the land of the free and home to the brave, has been for a very long time considered as the land of opportunity. Where people from all over the globe come to create fortunes.
Similarly, thousands of small businesses are born every year. Being established for the ultimate goal that is to live the American Dream. Unfortunately, out of these thousands of businesses only a handful of them reach stardom. Due to the extreme advancement in technology, and the globe becoming more of a global village than it ever was. Conducting businesses online has become a trend and even evolved into becoming the largest threat for retail stores, giants such as Amazon are now successfully over turning the giants of the past. This has also instigated large chunks of the population to set aside the traditional nine to five and set up businesses of their own. However, there are some common mistakes and trends that a major chunk of small business owners make. Here are six major mistakes to avoid in order to make your baby business grow into an enterprise.
So you woke up one day and had this billion-dollar idea. You grabbed your morning coffee and your laptop, immediately started researching on the possibilities of actually making your dream happen. It seems doable; there is little saturation within the market. You run a self-assessment, next you open excel and write down the processes you would need to go through in-order to make this revelation into your moneymaking business. You call your bank ask them the process of getting a business loan; simultaneously start reading up on the types of investors you can peruse and how to get the capital you need to start the engine. You even start to consider taking another mortgage on the family home, because you are confident on the numbers and returns.
After discussing it with friends and family, you realize you can manage getting the capital through them and through your bank. Things are starting to look good for you. Until you are thrown in to an impossible spot. Do you hire your cousin to help you build the business? Alternatively, do you get people that actually know what they are doing, since financing is not a problem anymore?
A business owner, no matter its size and capacity needs to adapt into the role of a leader. You need to make decisive decisions, stand your ground and be prepared for any opportunity cost that might come with those decisions. Not being able to quickly and promptly take the necessary steps to ensure the maximization of your business, and keeping it first before anything else, being prepared to make sacrifices and following through with it till the end are all integral and often times easily undermined.
You need to be mentally and emotionally prepared to go through the storm of the initial startup days. For every success, sacrifices are imperative.
Remember when you were confused between hiring your cousin or a seasoned professional to handle certain aspects of your business? In every business, be it the service or product industry, human resources are the most valuable assets of a business. Getting the wrong people almost instantly means a total collapse of your organization. You are only as great as your staff is. For the same reason leading businesses, internationally ensure the maximum comfort and go out of their way to make sure employee morale and satisfaction is always kept high.
Here is the bank loan and second mortgage part we were discussing. Never, start a business with your money. It is the golden rule of business; a business can only be successfully run and nurtured if there is substantial amount of money flowing in. You need to bring in investors and get people that can actually contribute to your cause for a long time. Putting in all of your money is not just a huge risk that many small business owners take; it is also one of the major reasons for their dismissal. Your idea might be airtight, but it is not worth the roof over your head. Every business has reoccurring constant expenses that need to be taken care of, which can only be done through a constant flow of cash. Then you have unforeseen expenses, where you need additional money to cater to them.
Inevitably self-financing might seem the fastest way to get your small business up and running, but it is most definitely not a recommended one.
You are extremely organized with all of your documentations, maintain a ledger on excel or other accounting software on your pc. You know you can manage the numbers and are confident in your bookkeeping abilities. Are you prepared to manage and maintain your business’s books on your own? A quick answer right now might be Yes, I can!
Saying you can is a good and empowering thing, however, bookkeeping and financing is a domain that you should let small business bookkeeping and taxation firms such as Monily handle for you. Money comes and money goes, when you enable professionals to manage your money affairs you have more time to worry about the day-to-day operations of your business. Being occupied with the books or having to take out time to update them is a huge hassle. At the beginning, it might seem like a very easy thing to do, once your business starts picking up it will inevitably become a real pain.
Many business owners, fail to see this problem, and prefer to micro manage every aspect of their business.
Undermining the competition and misreading the market are common mistakes and are also the deadliest ones a small business owner can make. Never undermine the ability of those that have been in the trade longer than you have or that are also in it with you. Businesses such as Nokia are great unfortunate examples that should be looked into by all businesspeople.
Your competitors can be your greatest threat but are also the best way to learn and educate yourself on what to do and what to avoid when you submerge into the industry. Market trends constantly change depending on the industry that you are in; making the right call at the right time can sometimes become the sole reason for your success or your demise. Keep a close eye on what other people within your industry are doing, simultaneously interact with any source of information that you can, to learn about trends that are on the rise. Suppliers and retailers are a great source for manufacturers to be ahead in the game. If you are planning to get into the service sector, directly talk to your customers, gather feedbacks from them and make changes to rapidly adapt, to what they need and expect from your business.
Having a proactive and customer centric approach is a key element in reaching and staying at the top.
The best way human beings learn are through their mistakes, you might fall a thousand times, but it only takes one more attempt to make it right. Hearing that only a few hundred out of the millions of startups make it to the finish line should not be any reason for you to stop perusing your dream. Remember where passion flows, fortunes follows.