A number of people start new businesses each year. While they may not consider themselves to be entrepreneurs, the simple fact that they are not employed would in most people’s mind, make them an entrepreneur.
A number of new entrepreneurs fail, but why? What are the common mistakes they make?
1. Lack of customers
A lack of customers may seem pretty obvious, however, on occasions businesses are started on a whim. ‘This would be a good product and I am sure that people will buy it’ - not so.
This can very clearly be the case when starting a restaurant. The location and footfall is unproven, the food untried and the chef new to the operation. To be successful, this type of operation may be best suited for the proprietor to be the chef. The proprietor is demonstrating that he can ‘work ‘on the tools’ and they are taking their track record and expertise along with them to this new location. They are effectively, through their food services, selling themselves, their charisma and clear expertise.
Then if they do not generate custom then the business idea is a loser. Do not continue past 6 months if that is the case.
There is no business without customers. Why not start a new business with customers committed.
2. Not enough seed capital
Businesses need working capital and to leave yourself short as you start an enterprise is a disaster. The business owner would revert to spending too much time scheduling payments to suppliers and creditors, not focussing on the bigger and wider issue of gaining custom.
The business may never fulfil its projected expectations. The business could well fail as a result of this shortcoming as suppliers may cease their support and the supply chain stops.
Plan your early years carefully and detail the expected cash flow. Add a contingency buffer which will undoubtedly be required –it always is.
3. Poor service, not enough attention to detail
When you start your new business you need to be all over it. Attend to the minutiae of detail, make sure your customers are not only satisfied, but happy and able to recommend you and your services.
Go the extra mile, it will pay dividends as customers and clients will appreciate the interest and attendance.
Take a look at the section on legendary service in my book, ‘Drive Like a Real Entrepreneur’ to understand how you can implement high levels of customer service. Give it a try in your operation.
Build, learn and develop to ensure you don't endure these common mistakes. If you have any questions or wish to comment on this post then please do so below.