Are you planning to start a new business? There are many hazards that might be faced and avoiding these can help improve the chances of success.
Here a few hazards new entrepreneurs should try to avoid.
- Under financing: lack of sufficient funding is probably the most common reason new businesses fail. Many entrepreneurs fail to assess the burn rate of the capital they have. One costly step is hiring too many people. Try paying people with equity rather than salary, you will end up with a much more committed team and preserve cash. Don’t overspend on equipment and technology you really don’t need to get going.
Also, many start-ups fail to realize that few customers pay promptly; this can severely impact cash flow.
- Starting without a plan: enthusiasm over a good idea is over-rated. An idea is only an idea and without a well-developed business plan chances of success are minimal. It is also very difficult if not impossible to raise financing without a plan.
- Fear of Failing: It is natural to have some fear that the business will not succeed and certainly problems will arise and challenge your business acumen. However, if the concept is strong and validated you should not let fear of failing stop you from trying to live your dream.
- Inflexibility: with start-ups you have to be prepared to change on the go. Rarely does the plan get executed without a hitch. Marketplace dynamics, competitive behaviour and economic conditions can dramatically impact the plan. Ability to react and change plans may be a key to survival.
- Assess your Strengths/Weaknesses: an honest evaluation of your skillset can be critical. Look for partners who my share the burdens of start-up by supplementing the skills you lack. Focus on your strengths and let others fill the void of skills you need. Chances for success will improve.
These are some hazards you may face in starting a business. There are others but avoiding these may help improve your chances of a successful start in business. I hope this helps you get underway. Let me know.
About the Author:
Gerry Simpson – Owner, Polaris Group Management Consultants
Gerry provides professional and experienced business experts and strategic management consultants with sound administrative, organizational and communication skills. Gerry is also an Entrepreneur-In-Residence at EPICentre. http://www.polarisgroupmc.com/