We had Barbara Talabisco, President and CEO of Wakefield Talabisco International, contribute a guest post for us about common small business mistakes. Check it out and learn from the experts on Markaaz!
If I had fifty cents for everyone who asked me, “Is this a good business idea?” I would be a wealthy woman. The problem is, unless I’m aware of all the Small Business mistakes I can make and have the know-how to avoid them, I can’t succeed, and you won’t either. I’ve gathered these mistakes from what I’ve learned over the years and how to avoid them.
Doing What You Love
“Do what you love” is a piece of business advice that has been doled out forever, but it is a big business mistake for many people. The reality is that there are many people out there who love things they are not good at. I bet you can name several people right off the top of your head, such as the person who thinks she’s a great cook but isn’t, or the person who thinks they are great at throwing parties when they aren’t. My official advice for starting a Small Business is, “Don’t do what you love, do what you are good at, and make sure it is something people will pay you well for.”
Failing to do Market Research
I see many people launching Small Businesses before doing market research. The result is heartbreak as the business they invested so much time and money into collapses. Test your Products & Services before starting a business. If you don’t, you will have no idea if people even want to buy them. You might think you make the best food globally, but tons of other people may be doing it better than you.
Ignoring Your Competition
Ignoring the competition is another potentially fatal business mistake. Another aspect of competition you need to understand is Market Saturation. The pie is only so big, so to speak, for every Product or Service. Once you open a business, there may not be any “room” left for that business in your local area. You also want to ensure that the market isn’t already “saturated” with the business you wish to open.
Not Taking Into Account Your Own Strengths and Weaknesses
We all have them. Unfortunately, sometimes our strengths or weaknesses don’t fit well with the business model we want to use, leading to disastrous results. For example, if you’re not a friendly, outgoing type of person with good people skills, retail is not for you. It doesn’t matter how many years you’ve dreamed of opening that bookstore; it’s not for you. That doesn’t mean you can’t buy such a business or start one yourself. But for it to succeed, you need to be aware that working behind the counter is not something you should be doing; you’ll need to hire staff right away who really love people.
Not Understanding What You’re Actually Selling
For me, one unique aspect of a business is being passionate about what you are selling. The first self-made female millionaire, Helena Rubinstein, didn’t become rich selling face cream; she became rich selling beauty. (“There are no ugly women,” she used to say, “only lazy ones.”) If your new business is going to be successful, you need to know what you’re actually selling and craft your unique selling proposition accordingly.
Making Sure You Have Enough Money
95% of businesses will not make money when they first open, and many new companies will not make significant money for years. (The exception: the five percent that makes money when they first open, or businesses that are actually just “carry-overs,” employees who become contractors, a fairly common practice in industries such as IT.) This means that you (and your family) have to have enough money to live on while your new business is getting established, as well as enough money for the company to survive and grow. Not getting the money to do this before starting your small business is a serious business mistake.
Small business financing of some kind is the most obvious way to do this, either through a traditional lender or through a non-traditional alternative. Perhaps you can qualify for a startup grant. How to ensure your Small Business makes money includes several other innovative ways you can bring in bucks while starting up.
Not Investing in Marketing
Following the common advice “Build it and they will come” is another serious business mistake. Come where? Why? Or even when? No one will know without some effective marketing. Far too many small businesses are reluctant to spend any money on marketing, let alone a significant amount. Free marketing can be excellent – but most free marketing strategies take a significant amount of time before they become effective. (Referrals and social media marketing are examples.)
Not Bothering With Any Online Marketing
One way or another, your small business has to be online. You may or may not need a website (many individuals who provide services use other “homes” on the web, such as Facebook or LinkedIn pages or Etsy sites), but your business needs to be able to be found by and promoted to the ever-increasing number of people who use the web to find the products and services they want.
If you’re not going to do anything else, establish a home base for your business online and be sure that your small business is listed in various online directories. Actively marketing your small business online is even better and will give it a far better chance of reaching your customers. One possibility is to engage customers through social media. Learn How to Create a Social Media Plan.
Trying to Do Everything Yourself
You can’t. It’s that simple and that aggravating. Running a small business, even if it’s a one-person business, involves so many different tasks that no one person can do them all well. Even if each of us was perfect and had all the skills to do an outstanding job at whatever we set our hands to, we are still constrained by time. Most days, you’ll be lucky if you even finish what you planned to get done when your day started.
I urge you to sidestep the business mistake of trying to do it all and increase the chance of your new business succeeding by getting the help you need from the get-go. Learn how to delegate, hire and outsource to make the most of your skills and benefit from outside expertise.
For example, do you really need to do your own accounting? Accountants have a lot more financial and tax knowledge than you have, more than likely, and can save you a bundle of time (and even money!) at tax time. (Speaking of outside expertise, have you thought about creating an advisory board for your small business? It can give you a real management advantage.)
Not Creating a Business Plan
Is your good business idea feasible? The problem is that unless I write a business plan, I have no idea – and you won’t, either. That’s the main purpose of a business plan.
Yes, it’s time-consuming and demands a lot of research, but investing time now will save you so much time and money later. Create a Marketing plan, set up some marketing campaigns, and keep doing it if you want your business to succeed. My best tip? Market your business before you open it. No rule says you have to wait until your physical or virtual doors are actually open.
Who Doesn’t Want to Succeed?
I have yet to meet a person who wants to start a business that’s going to fail. If starting a business is in your future, understand that starting a business is a process, not an event. Take the time to do the thinking and the research and avoid the business mistakes discussed above. You’ll hugely increase the likelihood of your new business succeeding.
President and CEO
Wakefield Talabisco International
About the Author: Since founding Wakefield Talabisco International in 1992, Barbara has brought her vast network of personal contacts and in-depth industry understanding to the firm. Her dynamic results-driven personality, ingenuity and combination of creative candidate-development skills consistently generate successful placements. Barbara leads searches for corporate clients ranging from innovative start-ups to billion-dollar multi-nationals.
Barbara’s experience in the executive-search industry spans more than 30 years. With a background in research, she moved rapidly to the level of partner and has contributed to the success of the well-known firms Judd Falk, Rene Plessner, Kurt Einstein Associates and Gilbert Tweed Associates. Barbara’s industry specialization encompasses consumer products, financial services, direct selling/direct marketing, fashion, cosmetics, technology, and retail. Her clients include some of America’s fastest-growing companies.