Many entrepreneurs have the dream of getting involved with a start up business at some point in their careers. While starting a new business can be very rewarding, many potential business owners make mistakes along the way that end up costing them a lot of money. In some cases, these mistakes can be fatal to the lives of their businesses. Any entrepreneur who is considering getting involved in a new business should avoid some of the most common mistakes that come with the territory.
Hiring the Wrong People
One of the biggest mistakes that most new business owners make is that they hire the wrong people to help them get started. Employees are one of the most valuable resources that good businesses have. Business owners have to rely on their managers to take care of many different things for the business. They also have to rely on the common workers to actually get the job done. If an emphasis is not put on hiring quality individuals, it could end up causing a lot of problems for the business owner. Business owners should look for trustworthy individuals who are willing to learn and work hard.
Not Researching First
When a new business gets started, it has to immediately start competing against businesses that are already in the area. Some business owners are oblivious to the competition, and fail to take it into consideration before opening a business. Prior to starting a business, a business owner should engage in a detailed market analysis, and do some heavy research. Some areas are not big enough to handle multiple businesses of the same type in the vicinity. Doing a little bit of careful research can help prospective business owners avoid making big mistakes.
Not Creating Awareness
Another problem that some new businesses run into is that no one knows they exist. When it comes to starting a business, it's up to the owner to get the word out. This may involve doing a heavy amount of advertising initially to make sure that people know about the business. Many new businesses are scared to spend anything on advertising because they need the money just to keep the doors open. By spending money on promotion, businesses can overcome the lack of knowledge in the market and start competing with the bigger businesses in the market.
Relying on Too Much Debt
Some new businesses rely on debt financing solely to come up with the cash they need for operations. While there is nothing technically wrong with borrowing money to start a business, it can get a company started off on the wrong foot. Instead of relying solely on borrowing money, a business owner may want to seek out investors or tap into other sources of cash first. When too much debt is accumulated, it can be difficult for the business to get out of debt, and take control of its financial situation again.
Wrong Location
When starting a business, it is vitally important to choose the right location. Many businesses make the mistake of getting a cheaper property that is off the main road when their business requires a lot of traffic to be successful. They might also rent a space that is much bigger than what they need to be successful in the long run.
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Michelle Reynolds has helped hundreds of business owners understand how to improve their company finances - using her 20 years experience working as a corporate Finance Director and years mentoring start up businesses she created http://www.thefinancementor.com - an online training & mentoring course for startups.
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