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Starting a Small Business!-avoid these four
Major Entrepreneurial Mistakes.
by Kanaga Siva
Published on this site: November 18th, 2006 - See
more articles from this month
It is with much hope that every entrepreneur sets off starting a Small
Business. Making money was his main objective. Failure was never in his
mind but things don't seem to happen the way he had planned for. Even
the hope for Survival seems to have disappeared and Failure haunts him
at every turn.
Why does this happen and happen so often to numerous small business
entrepreneurs?
- Improper or no Research:
The most fundamental thing to do before starting a small business is
to do a market research to find out whether there is sufficient demand
for the product or products you have to offer.
Perhaps the reason for the failure to generate the funds is that there
is no market for your product or the market is saturated. The need for
your product in your area of business activity should be your prime
consideration before starting a small business. Only if there is sufficient
demand for your products, you will be able to generate the funds necessary
to help you run your small business, survive and succeed.
- Improper or Under Funding:
Quite often the urge to start a small business is so great that the
very vital aspect of funding is not given due importance. Businesses
are started on a shoe string budget and shops open with very little
stock and offices with insufficient equipment.To ensure the purchase
of stock and equipment it is absolutely essential to have proper funding
in place before commencing your business. Furthermore your business
might take several
months to start making a profit and hence funds are necessary to help
your small business survive and keep your morale up during these early
months.
If you don't have sufficient funds of your own, it will be wise and
proper to obtain a loan before starting your business. This could be
obtained from your bank or you can seek the assistance of the Small
Business Administration which offers numerous loan programs to assist
Small Businesses. It is important to note that the sba acts primarily
as a guarantor of loans made by private and other institutions.
Taking huge loans out of proportion to your needs can also be detrimental
to your small business since provision has to be made for higher interest
payments.
- Insufficient Advertisement and Promotion:
No Business can be successful unless the public is made aware of the
existence of your small business and its products. The best of equipment
and stocks cannot generate sales unless the public is made aware of
it. Hence advertising your small business and the products before the
commencement of your business and thereafter should be a major consideration.
Failure to do so has been the cause of failure of several small businesses.
- Unnecessary expenditure:
One of the major causes for the failure of a small business is the improper
handling of the funds. Extravagant expenditure at the initial stages
such as the purchase of expensive cars, equipment and expensive business
lunches completely out of proportion to your needs can eat into the
capital and leave your small business with very limited working capital.
Hence
proper and wise handling of funds especially at the early stages can
make all the difference between success and failure.
Conclusion:
Failure to avoid the above mentioned mistakes for one reason or the other
can be detrimental to the progress and success of your small business.
Securing the services of a consultant to help you plan out your small
business before starting will be a wise move to ensure success.
Kanaga Siva - has a wealth of experience in Marketing and also
operating a Home Based Business. Visit his
http://www.business-fromhome.com website for Articles, Resources,
Ideas and Advise to start and operate a successful business.
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