More and more I am coming across individuals, who want to start up a business, but who have no clue about what they are doing and who don’t have any kind of plan in place. Now having an idea is great, that is what starts the dream but quite honestly, not having any kind of plan in place is the same as committing suicide – business suicide!
A business that does not have any kind of plan in place will often have neither direction nor focus and if that is the way that you are starting up, quite honestly, that is the quickest way to just close the doors. Many start-ups feel that the only reason to have a business plan in place is if they need to raise capital and they couldn’t be further from the truth. Having a documented business plan in place will help to direct the process of starting a new business and for those businesses that are already established, it will help them keep focused on what they want to achieve and by when they want it achieved.
Your business plan however, is not a ‘once off’ kind of document. It needs to be updated and changed as the business grows and as your requirements and needs change too.
Being cocky and full of nonsense, is definitely not going to endear you to anyone. So many newly started business owners, who are in the first flush of success (read: they are in their 2nd month of trading and the glow hasn’t worn off yet) think they are invincible. My advice to them is “Get a grip!” They often compare themselves to the greats out there and strut their stuff, but as tempting as it is, they need to remember that they are still taking the first steps and adjust themselves to that.
Don’t get me wrong, there is nothing wrong with dreaming that you will get there . . . one day, but you need to remain grounded, focused and with your feet firmly planted on the ground. Remember all big businesses started out as little businesses and although every journey starts with a single step – you have taken that first step and now you need to take the next, and then the next and then . . . you get my drift I am sure.
Trying to sell yourself to your clients and suppliers as ‘established’, when you’re not will only make them see you as dishonest and it will not work in your favour in the long run – so just don’t do it!
Don’t try and be clever by extending credit to your clients when you have just started out – the reality is that you will end up with a lot of bad debt and clearly this will affect your cash flow in a negative way. Getting money in quickly and efficiently will allow you to go to the next step of your plan a lot quicker and without as much risk. Having to continuously wait for your money puts your business at risk and will cause you untold unnecessary stress.
Next time we will have a look at some of the other common mistakes.