Entrepreneurs are generally upbeat people. Who else would invest their heart, soul, hard-earned money, and limitless energy into something that has a 50% chance of failing in the next five years?
However, the hardy ones who succeed understand that it takes more than hope and desire to make a business work: You’ll need a road map that not only shows you how to identify success indicators, but also cautions you about potential pitfalls.
Granted, there are probably as many reasons for company failure as there are startups, but here are nine frequent blunders to avoid, as well as some hard-won knowledge from entrepreneurs who have seen firsthand how crippling those blunders can be.
1. Allowing Love to Destroy You
When Alfredo Atanacio was in his early twenties and frequently travelled for work between his home in Miami and his native El Salvador, he discovered that having a virtual assistant helped him stay organised. Other professionals, he reasoned, must be in the same predicament and would welcome (and pay generously for) bilingual virtual assistants’ assistance. As a result, Atanacio and his business partner, Rodolfo Schildknecht, founded Uassist.ME in Miami in 2009 as a virtual assistant services company for busy people.
However, the partners were incorrect in their assessment of a market need. “No one wanted to try it, and we wondered aloud, ‘What the hell is wrong with these people?'” Atanacio recalls something. Uassist.ME was charging $700 per month at the time. Potential customers and advisors suggested charging a lower price and targeting businesses rather than individuals, but the partners were adamant about sticking to their original plan.
After months of no obvious increase in consumers, they gave in and modified their business model, focusing on enterprises and introducing tiered pricing that began at $200 per month. “Now, 80% of our customers are businesses,” adds Atanacio, “and the majority join up for the $200 plan and subsequently upgrade.” We now have roughly 300 consumers who pay somewhere between $200 and $1,500 per month.”
While UAssist.ME is back on track, Atanacio recognises that he has lost time and traction. “I was enamoured with the concept and despised it when people told me how I should operate the company,” he adds. “You lose your sight, and that’s a costly error.”
2. Inability to concentrate
When you first start a business, it’s easy to get distracted by bright objects—opportunities that beckon your attention despite the fact that they may not be related to your primary business. “I pivoted way too many times in the early days,” admits Matt Wilson, who co-founded Under30CEO in 2008 as a social network for young entrepreneurs. Wilson and his co-founder, Jared O’Toole, were cash-strapped at the time, and “since we had no money, we were always pursuing the next idea that was going to make us rich or at least pay our bills,” according to Wilson.
The partners experimented with selling personal development products such as books and e-courses, as well as affiliate marketing, consulting, and daily discounts. They’d attempt another revenue model if one didn’t work out right away. Wilson reflects, “If we had started with some money, it would have given us the leeway to be more patient.”
Now, Under30CEO is a media company that mostly makes money from advertising. And the partners have launched Under30Experiences, an adventure travel firm for young adults that will grow from one trip per month to five by the end of the year. In addition, a publishing section is in the plans.
“Now, when I start a revenue model, I try to do it for the long haul,” Wilson explains. “Start with capital, choose a method of making money, and stick with it,” he learned.
3. Lack of financial resources
No. 2 comes to mind.
4. Excessive planning
Isn’t it true that you’ll require a business plan? Perhaps not. Spend too much time debating the finer points of your concept, and you may find yourself out of business before you even get start of it.
Morgen Newman, co-founder of IdeaPaint and of MixedMade, a new startup that manufactures Bees Knees, a spicy honey hot sauce, says, “It will evolve and show the planning is a static activity based on a perspective insufficient as you begin to execute and learn.” Newman and his partner, Casey Elsass, found MixedMade with the goal of bringing their innovative product to market in 30 days.
“Even when preparation seemed easier or safer,” Newman recalls, “we were forced into action.” “Although our self-imposed deadline was difficult, I believe it made our job easier.”
The partners’ goal was to immediately demonstrate that Bees Knees had a market before investing in other areas of the business, which required them to have a laser-like concentration. “With only a few days to complete all of the launch goals, we had to keep asking ourselves, ‘Is this item I’m doing genuinely getting us closer to our launch goal?'” According to Newman.
Choosing a product name, locating honey and bottles, testing with the mix, and drawing a logo were all done quickly and with the idea that no selection would be “perfect.” However, their method paid off, and the company has already attracted the attention of a large retailer.
Source: online business , online business ideas
