Breaking News

The 9 Traps a New Business Must Avoid

1. Know what you Do well, and what you Do Not do well— You think you know what to do to start your new business. Even if you do, you have to look way beyond the start-up phase for traps that can throw you off course. You have to look beyond the start-up and consider your operations, your staff, your sales goals, your marketing plan, your accounting and bookkeeping, your proposals and bids, your scheduling, your customer and vendor relationships, and your follow-up to maintain the business relationships. All of these areas can create unmanageable havoc for your new business and lead to failure. You must recognize the areas where you need help, and hire the help you need.

2. Never start your business before you Plan, Plan, Plan–It is expensive, complicated, time consuming, and frustrating to write a complete business plan. However, even small, unsophisticated businesses must have a business plan. You must have your ideas, goals, milestones, and measurements documented in a comprehensive plan that has detailed information about the competition, your target market, your customer profile, your marketing and advertising, your financial goals, and you plans for growth.

3. Have a professional business identity— Your business logo is often the first thing your customers will see. It must be professional so that your business looks professional. Do not try this at home! Business cards designed and printed at home will not send the right message about your business. One of your most important investments is in your business identity and your marketing collateral.

4. You and your family must understand and be willing to accept the personal sacrifices that running a business requires— Most new business owners spend 12-18 hours working every day during the start-up process. This creates emotional and physical stress on you and your family life. You must be absolutely certain that you and your family are ready for this stress before you begin. Be sure that your family understands and supports the time and energy that your new business will require. Try to anticipate and explain the kinds of changes your family will face while you are building your business.

5. An under-capitalized business will fail–Accurately calculate how much money you will need to open the doors to your business and how much money you will need to operate your business and pay expenses until you are generating enough revenue to cover expenses and overhead. Do not underestimate advertising, salaries, taxes, utilities, rent, office supplies, and the many other expenses that you will have to pay. Can you survive financially if you cannot pay yourself a salary during the start-up period? At a minimum your business needs enough start-up capital to pay expenses for 6-12 months.

6. Be sure you do not overlook the laws, codes, and regulations that control your business operations— Contact County, City and State agencies and determine their requirements. You’ll need a Federal Tax ID Number.

7. Never underestimate the value of networking and building strategic partnerships–You can develop contacts that know and trust you and will do business with you and refer business to you. Networking helps your businesses become visible without much cost, and it helps you build relationships. You can find which business groups meet and their schedules in the Business Journal, and you should sample then and choose one or two that you think are best for your business. Most business networking groups will let you attend a few times without joining. Find groups that have businesses that serve the same client base as your business, and you can build strategic alliances with mutual referrals.

8. Research on the Internet, with Small Business Association, with Governmental Business Resources, and the library–There are many places where helpful information is available for free that will help you start your business, generate revenue, and expand operations. If you need help with your research, you can hire someone to help you!

9. Get and stay current in technology–You absolutely must keep current with technology and use it in your business. You can greatly increase how effectively your run your business with the right software. You want to know what products are being used in your industry and by your competition. Your customers want to hire the company that uses the latest technology.