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Are you starting a business? Avoid mistakes!

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When it comes to starting a successful business, there’s no surefire playbook that contains the winning game plan. On the other hand, there are about as many mistakes to be made as there are entrepreneurs to make them.

When it comes to starting a successful business, there’s no surefire playbook that contains the winning game plan. On the other hand, there are about as many mistakes to be made as there are entrepreneurs to make them.
Here are, in experience of Rosalind Resnick the founder and CEO and Axxess Business Consulting Inc., the top 10 mistakes that entrepreneurs make when starting a company:

 

1. Going it alone.

It’s difficult to build a scalable business if you’re the only person involved. True, a solo public relations, web design or consulting firm may require little capital to start, and the price of hiring even one administrative assistant, sales representative or entry-level employee can eat up a big chunk of your profits. Make sure there’s enough margin in your pricing to enable you to bring in other people.

 

2. Asking too many people for advice.

It’s always good to get input from experts, especially experienced entrepreneurs who’ve built and sold successful companies in your industry. But getting too many people’s opinions can delay your decision so long that your company never gets out of the starting gate. Assemble a solid advisory board that you can tap on a regular basis but run the day-to-day yourself.

 

3. Spending too much time on product development, not enough on sales.

While it’s hard to build a great company without a great product, entrepreneurs who spend too much time tinkering may lose customers to a competitor with a stronger sales organization.

 

4. Targeting too small a market.

It’s tempting to try to corner a niche, but your company’s growth will quickly hit a wall if the market you’re targeting is too tiny. Pick a bigger market that gives you the chance to grab a slice of the pie even if your company remains a smaller player.

5. Entering a market with no distribution partner.

It’s easier to break into a market if there’s already a network of agents, brokers, manufacturers’ reps and other third-party resellers ready, willing and able to sell your product into existing distribution channels.

 

6. Overpaying for customers.

Spending big on advertising may bring in lots of customers, but it’s a money-losing strategy if your company can’t turn those dollars into life-time customer value.

 

7. Raising too little capital.

Many start-ups assume that all they need is enough money to rent space, buy equipment, stock inventory and drive customers through the door. What they often forget is that they also need capital to pay for salaries, utilities, insurance and other overhead expenses until their company starts turning a profit.

 

8. Raising too much capital.

Believe it or not, raising too much money can be a problem, too. Over-funded companies tend to get big and bloated, hiring too many people too soon and wasting valuable resources on trade show booths, parties, image ads and other frills.

 

9. Not having a business plan.

While not every company needs a formal business plan, a start-up that requires significant capital to grow and more than a year to turn a profit should map out how much time and money it’s going to take to get to its destination. This means thinking through the key metrics that make your business tick and building a model to spin off three years of sales, profits and cash-flow projections.

 

10. Over-thinking your business plan.

While many entrepreneurs I’ve met engage in seat-of-the-pants decision-making and fail to do their homework, other entrepreneurs are afraid to pull the trigger until they’re 100% certain that their plan will succeed. The truth is that a business plan is not a crystal ball that can predict the future. At a certain point, you have to close your eyes and take the leap of faith.

 

Despite the many books and articles that have been written about entrepreneurship, it’s just not possible to start a company without making a few mistakes along the way. Just try to avoid making any mistake so large that your company can’t get back on its feet to fight another day.

 

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