Your Business Idea is Born …now what?
Perhaps you recently came up with a great new business idea. The concept makes sense and your friends or co-workers urge you to give it a try. This could be the beginning of a successful entrepreneurial venture. However, you must realize that an appealing idea isn’t all you need, it’s just the beginning.
These four pitfalls can sink many promising startups:
1. No strategy, values or long-term vision
Few companies succeed by simply putting a product on the market and expecting it to sell. To have staying power you must have strategy and values that takes you to your vision.
An example of how vision and value produced perseverance in the face of huge adversity is found in the early history of the well-known apparel brand, L.L. Bean. Its founder designed a new boot and manufactured 100 units. The products quickly fell apart, so nine out of 10 customers returned them. Nevertheless, L.L. Bean became highly successful after discovering a way to boost quality.
At the founding of the company, Leon Leonwood Bean established his golden rule which summed up his strategy, values and vision: “Sell good merchandise at a reasonable profit, treat your customers like human beings and they will always come back for more.”
Your business could fail if you don’t set aside time to strategize and research the viability of your idea. A few minor adjustments could help your service appeal to a much larger audience. That’s what Mr. Bean did, and his adjustments to those boots paid off for this 104 year old company!
2. No financial focus
A business probably won’t succeed if you don’t have reasonably good financial information. Most people know their monthly sales and bank account balance, but that data does not even scratch the surface of what the entrepreneur really needs to focus on.
From the beginning, you need to know your profit margins per each revenue stream. What your fixed and variable costs are. What your most profitable services or products are. When do you reach break even. What the cash needs are to fund you until you break even, and how much cash will it take to sustain profits versus how much cash is being generated.
Even developing a simple spreadsheet to help project various financial scenarios will help you navigate these choppy startup waters.
3. No emphasis on marketing
Some entrepreneurs believe that a quality product or service practically “sells itself.” In reality, almost any new business needs skillful marketing campaigns to attract customers and successfully compete with other companies.
It must target the right audience and clearly explain a product’s benefits. Furthermore, you must know who your competition is and what they are doing and how you are different and better. Writing a clear marketing strategy that includes all this, plus the best channels to promote your services or products can be a powerful exercise.
It’s never been a better time to reach potential clients through social media channels. If you have marketing funds, you can leverage your promotion even faster. Whatever you use, apply your strategy, have effective metrics to measure results and define what success looks like. And don’t despair, keep working your strategy until you find the right one for you.
4. No guidance or mentoring
When founders unknowingly try to reinvent the wheel, they may waste considerable amounts of time, money, and effort. This also happens if an entrepreneur only seeks advice from friends, family, employees, etc. who may have good intentions, but little business knowledge. It’s vital to learn from people who are business savvy and successful.
But, not every successful business person is a great mentor, who can guide you in making wise decisions, speaks frankly, and doesn’t have any conflicts of interest.
Great mentors are hard to find. Beyond skills and success, they need to understand you. There needs to be a connection between you and your mentor. They need to be for you and your success without reservation. So, when you find one, hang on to them. They are an invaluable resource for your entrepreneurial passion.
With that kind of relationship, they can provide straightforward feedback that builds you up. An experienced business mentor can provide valuable guidance that will help you avoid ruinous mistakes.
Intigro does offer affordable one-on-one mentoring with unbiased advice. We’ll guide you and your company’s finances in boosting net earnings, strategize steady growth, and much more. Please contact us to learn more about our mentorship or business building sessions.
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Obviously, there are no guarantees of success; however, if you do the above, your chances for success are improved.
If you are considering launching a business or growing your ongoing company, check out Dear Mr. A for creating strategy around your passions. The Next Level Navigator strategy process is a great crowdfunding tool! Click here to look inside Dear Mr. A.
Why not tell us about your own startup successes or failures and how its affected your businesses? Please do so, either in the comments below, or by submitting a guest post to us. We review these posts carefully, and as long as your contribution adds something to the entrepreneurial community we’d be happy to feature it on our site with a link back to yours!