Jul 12, 2019
As a budding entrepreneur, when it comes to the road to success, nothing beats optimism and perseverance. However, creating and managing a company is not always so simple, neither is it something that is learned overnight. Learning to create and manage a company requires theory, but above all, a lot of practice. In order to avoid the pitfalls many companies have faced, try making a note of the following.
The lack of experience often translates into too much optimism, unrealistic projections, hasty decisions, inefficient management, etc. For this reason, time, experience and assistance from a business coach is always the best way forward. The experience most business coaches have acquired is immense; their knowledge of creating and managing companies will be truly valuable for you.
Alternatively, if you do not have much experience, it is advisable to start small. Starting with a small business, assuming a certain risk, and making decisions without fear of failing can help you get off the ground faster. Most importantly, knowing that mistakes and failure are where you learn the most from.
That sounds obvious, well-known and logical. However, the problem is – many companies have no idea what all this means: You must have one hundred percent ensured that the infrastructure of your company exists. And that you can finance the daily business for a longer period of time.
However, many entrepreneurs think that it is enough if these conditions are met to 95 percent. A fatal mistake: the necessary capital needs must be 100% covered.
A bad choice in the location of a company is another common reason why companies often fail. The location of your company is an important aspect that you must take into account if you want to avoid premature failure and, on the contrary, achieve success.
When choosing the location of your company’s premises, take time to look for alternatives, and choose carefully, taking into account factors such as our target audience, competition, the public’s influx, costs, accessibility, visibility, etc.
Finding a company with too much debt early from the start might be a recipe for disaster because the debt clock is ticking from day one. Without the necessary income for debt eradication, you risk slipping into the vicious circle of the debt economy. This problem often arises when a good budget of expenses or sales forecast has not been created from the beginning, or the expected sales are not obtained, or there is not enough money to be supplied.
To deal with this problem, before starting a business, the first thing to do is develop a good business plan that allows you to make a good projection of both expenditures and revenues. This, in turn, can help calculate what the capital requirement necessary to start up the company and to be able to operate it during the first months of living debt free or with manageable debt.
Good craftsmen, good engineers or good service providers are far from good entrepreneurs. An important feature is strategic thinking – you have to recognize the development of markets, feel them and have the ability to react early to changes. Those who only manage to launch a product often experience problems at a later stage.
While many companies have a concept and market ideas, the details of the company’s development and market penetration remain completely vague.
For example, when going on a holiday, the trip is planned in advance before the actual vacation, and you naturally decide when to fly off with the rental car and hotel room booked in advance. In the same vein, as an entrepreneur, a working business plan must be created in advance to answer some of the following questions:
Nothing is worse than spending hours developing a product only to find out that the market does not need the product, or does not understand it. That, too, seems a plausible and avoidable mistake – but it does seem to happen often. Why? Because many entrepreneurs only analyze a problem technically and abstractly. They, therefore, create a very good and logical solution. But then they forget to talk about it with those affected. Sadly, the result is that you will come with the product on the market, followed by the angry awakening.
Another of the main reason why companies often fail is excessive competition. Many times, a company is created that does not initially have much competition; However, after a short time, especially if the company starts to succeed, new competitors begin to emerge that will do everything possible to snatch their share of the market.
The main ways to deal with the competition are to offer a product of good quality, a unique, original, novel and different product; and in providing excellent service or customer service.
Your company can have a good idea for a good product – but that’s often not enough. Because every company has to develop over the years and conquer markets. But if you can not communicate this from the beginning, you will not find the necessary employees, partners, financiers, and talents in the first phase.
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