Some of the folloowing bad decisions are just missteps, while others create a mindset that sets you up for failure.
Bad decision #1: Not having adequate start-up capital.
No matter how much money you think it’s going to take to get your business off the ground, it’s never enough. Plan on spending every penny you have, and a bunch you don’t, before you pay yourself. In fact, don’t plan on paying your self anything for awhile. New businesses eat capital like babies eat cheerios.
Bad decision #2: Having no other source of income
Sometimes, you have no choice. You don’t have start-up capital, and you’re just flying by the seat of your pants. You have a great idea, and you go for it. It’s been said that the best time to look for a job is when you already have one. It’s also easier to start a business when you aren’t worried about putting food on your table. If you have a job, work your new business in the evening and on weekends until you’ve built it into a business that will sustain your lifestyle. Better still, if you have a spouse or partner in the business – one of you should keep your full-time job while the other works the business full or part-time. Or, maybe you both keep your jobs and work the business every waking moment you’re not on the clock. If you want it bad enough, the long hours will be easier to take.
Bad decision #3: No marketing plan
If nobody knows you exist, no one will buy from you. If you’ve done your homework, you know where your customers are, and how to reach them. Too many people start a business out of love, and think the customers will flock to them. It doesn’t work. It also doesn’t work to just throw money at the latest advertising to come across your desk. Make a plan. If you don’t know how, there are people who can help. (Start your search at your local SBA office)
Bad decision #4: Expecting immediate sales
You told your mom, your friends, and the women in your PTO group all about your new business, and they were overflowing with support. Support doesn’t pay the bills; sales do. You can make the best cookies in the world, but until people know you exist (see #3), and have a need for what you have to sell, sales will build slowly.
Bad decision #5: Playing the blame game
No one wants to do business with a whiner. When you’re feeling victimized by your business, your customers read that as a lack of confidence in your business. People want to do business with people who are positive, happy, and fun to be around. If things aren’t going as well as you hoped, keep that news close to the vest. When people ask you how your business is doing, always find something positive to say.
Bad decision #6: Thinking “No” is the end of the world
I’ve learned, after many years in the sales business, that “No” is a wonderful word. It cuts through the noise. It tells me my product or service isn’t a good fit, or my marketing message is wrong. It gives me an opportunity to improve. And, the more “no’s” you get out of the way, the closer you get to the golden “Yes.”
Bad decision #7: No plan “B”
Think you’re in the business of selling cookies? What if nobody else loves them after you’ve bought all the equipment, rented a commercial kitchen, created a website, and more? What could you do instead, that uses the same skill set and equipment? Sell dog biscuits? Plan what you would do if you fail, and you’re actually planning for your success, whatever gets thrown your way.
Bad decision #8: Being inflexible
You may have the best widget on the planet, but if nobody agrees with you, your inventory will stay piled up in the closet. Think on your feet. What haven’t you tried? Where haven’t you gone? Who haven’t you talked to yet, who may be in an entire new market segment for you?
Bad decision #9: Refusing to take advice
Successful business owners who are willing to give you the benefit of their experience are a special breed. When they give you advice, or make suggestions, listen. Even if you don’t see the practical application right away. Even if you don’t know how you’ll make their idea work. Trust their instincts, and then take all the advice you’ve been given to find your true path.
Bad decision #10: Being too afraid to really commit.
A business can only grow and thrive when you throw yourself into it. If you have a baby, do you “sort of” mother her? Do you take care of her when you feel like it, or all the time? Your new business is your baby. It will grow and thrive when you give it everything it needs. Sometimes that means everything you have.
Does your business deserve everything you have? Does it deserve all your free time, all the money you would normally spend on “extras?” Do you love it enough to be totally immersed in it? If not, maybe you’re not a true entrepreneur, or it’s not the business for you.
There should be a #11, so I’ll add it here:
Bad decision #11: Failure to Plan
A well thought-out business plan can help you avoid many of these mistakes, and help guide you when you hit a snag. There are resources at your local SBA office, or plan to attend the workshop on September 24.
If you want to succeed, take the time necessary to plan for your success. If you fail to plan, you can plan to fail.
My friend Ellen used to say, “It’s not always beer and skittles,” when we were faced with work that had to be done, but wasn’t necessarily what we preferred to be doing at the time. Starting a new business takes hard work, dedication, and the willingness to do things that aren’t always fun. In other words, “It’s not always beer and skittles.”