Starting a new business is an exciting adventure, but beware these traps!
Trap #1 Picking a Business with Your head, Not Your Heart
Of course you need to use your head, but not at first. At first you use your heart to see if you really love it. Are you excited about the idea, passionate about it? Put off thinking about the profit margins, the location, the clients, the customers, the employees. That comes after you decide that you love it. Will you feel joy? Will you feel proud of it?
Trap #2 Emphasizing Product Instead of People
Many very successful businesses have lousy products and do very well. The quality may be low, but the service is great; the volume is high because lots of people want it where it is being sold. People buy value, they do not buy products. Value is created in many ways that have nothing to do with the product. They perceive that it will make them feel good, look good, impress others, its convenient, its familiar, whatever. It fills on emotional need.
Trap #3 Confusing Marketing and Sales
Many small business owners try to sell while marketing. A big mistake. Marketing is done to get your company name recognition, to position it well in the marketplace, to introduce something new, or in a new way. Marketing is presenting an offer to targeted prospects. It is done to get the phone to ring. Selling is done to move the customer from being a prospect to being a buyer. They take different strategies, different approaches. Sometimes marketing and sales happen piggyback, but they are still different.
Trap #4 No Marketing Niche
Unless you limit your target you are trying to market to everybody. That doesn’t work. The marketplace is very big and until and unless you create a niche for your company in that big marketplace you will not get good results. Many businesses try to use price and only price as a niche. That is not the way to go about it.
Trap #5 Not Getting Enough Support
You own your business. You are alone at the top. You bear the weight of the responsibility. You sign the checks. Your employees do not share that; they go home at night and leave it behind. They can walk out at any time. Your spouse will not be continually supportive; your competitors will not; your employees won’t either. You can get support from a community service organization, or from friends, or an owner of a non-competing business. Ask for the support you need.
Trap #6 Thinking that You Are Your Business
Too many small business owners think of it as their “child.” They are much too ego involved with it. They can’t see it as a separate thing, an entity to be nurtured, grown, and then sold. This causes them to put the business first, before their family, their friends, and their own mental health. They think that if the business fails that they have failed. Pretty soon they hear people telling them to “get a life!” You have become a workaholic.
Trap #7 The Business is Out of Balance
Not all parts of a small business have equal value to the business. Many owners spend too much time doing the work of the business and not enough doing the entrepreneurial part of it. Most owners spend too little time on marketing. Marketing drives everything else and should receive a disproportionate share of the owners time. To give equal time to sales, marketing, administration, finance and operations is to throw your business out of balance.
Trap #8 You Run a Business with Negative Indicators
Suppose your sales are sufficient, customers are happy, employees are happy, you have a good location, lots of repeat business, things are well organized and well managed, but all is not well. Why not? Because you are in a counter-trend situation. The industry itself is going downhill; new technology is replacing your product little by little. You have to have a business that goes with the trend, not against it. You need to sell the business or change it to bring in new products/services.
Trap #9 Not Enough Testing and Tracking
To test, measure and track results is absolutely critical. You must pay attention to the results even if you don’t like them. Without enough testing/tracking you may think things are better than they are, OR, just as bad, you may think they are worse than they are. Either way, you lose.
Trap #10 No Back-End Sales
Many business owners market well to get new customers and ignore marketing to existing and/or prior customers. It is less expensive to market to them. Your chances of getting them to buy again are high. To ignore them is to ignore a very valuable potential.