The 6 Most Common Mistakes People Make When Getting Into Business
Written on the 13 January 2015
1. Not knowing how much money you have to invest to begin with
This is quite a common mistake. Some people will start to do all of the ground work and the research only to find out that they don't actually have the ability to get a loan to fund the business.
This is always one of the things to establish quite early on in the process. If you're unsure, the easy way to find out is get your home valued by your bank and subtract the amount that you have owing. This will give you an idea of how much personal equity you have to play with and how much that your bank may lend you.
2. Looking only at costs of setting up and not opportunities to make money in the local market
Knowing the local area and how to make money from the business is critical to actually making the decision to get into business in the first place. You're only getting half of the picture if you focus on the establishment and operational expenses without looking at the opportunity to make money in the local market.
Without looking at this big picture, you'll always be afraid to follow your dream.
3. Asking the opinion of people who are not in business themselves
This is a rookie mistake that many people make. It makes sense to talk to other positive people in your life who are operating successful businesses and find out from them what it's like being a business owner. It doesn't make sense to ask the opinion of people who have never done it before. This is especially important if you're transitioning from a corporate job to owning your own business.
Sure, there might be ups and downs, but ask a business owner if they would ever go back to being employed and the answer is always "no."
4. Believing and following the opinions of negative people
Everyone has an opinion on going into any type of business. Often when you share your dreams with the wrong people, they will give you their opinion based on their own personal bias or fears.
They might share with you some negative stories that they have heard from a friend about being a business owner. These stories will have nothing to do with you or your decision to follow your dream.
Surround yourself with positive and supportive people who are just as excited as you about opening your own business and ignore those dream snipers around you.
5. Failing to do a business plan and knowing your break even
As the old saying goes, "failing to prepare is preparing to fail." A business plan is about research and forward planning.
When the rubber meets the road and the business launches, a business plan may have to change and pivot, and this should be expected. Ensure that you've thought through all manner of scenarios and show that you have a backup plan for each. Knowing how many customers you need each day in order to cover all of your expenses is a very powerful key to success in any business.
6. Waiting too long to take the plunge
The decision to get into any business is a big one and one that should always be considered carefully. However, you will never know if you never give it a go. Will you be able to look back on life and say that you seized every great opportunity that came your way or will you look back with regret on the one that got away?
Franchised businesses often grow and expand rapidly and so if you want to follow your dream, don't take too long. It is also recommended that you secure a prime location for your business before someone else beats you to the punch.