Avoiding Fatal Mistakes as an Amateur Entrepreneur
There are a number of people interested in entering the small beading business, but not everyone has experience in the realm of entrepreneurship. Although the idea of being your own boss is appealing, starting a company does come with the potential to hit a few snags along the way. In worst case scenarios, these mishaps can result in the entire downfall of a small business.
Creating a business plan can help propel a company.
Although entrepreneurship is a challenging field, many people manage to enter it and succeed on a regular basis. Small firms pay 44 percent of private payroll in the U.S., according to the U.S. Small Business Association. These companies are not only important and beneficial to their owners, but to the economy as a whole.
CNN reports that there are a few things that individuals should look out for upon launching their small business. Although not everyone suffers from numerous set backs once they start their company, this does not mean that they are immune to problems. These are a few of the most common mistakes that amateur entrepreneurs tend to make upon entering the small beading business:
Holding back on technology: here in the digital age, technology is your best friend--especially if you're an entrepreneur. It costs money to purchase laptops, printers and Smartphones to operate your small business, but they are essential to staying connected to your clients, distributors and manufacturers. Instead of thinking about these expenses as another way to fall into debt, consider them an investment. In the end, technology can help you propel your business and maintain an edge on your competitors.
Lacking focus: oftentimes, an amateur entrepreneur's goals will fall by the wayside when they find initial success. For this reason, creating a defined business plan is a must. This document can help you not only outline your goals, but keep them in check. By assessing your progress in accordance to your plan from time to time, you can hone in on areas that need improvement. Try to set deadlines for yourself as well to stay on top of the plan and execute your goals in a timely fashion.
Underestimating sales: entrepreneurs are quick to focus on their expenses, especially when they have little money to start out with. However, experts say that failing to recognize the importance of sales can quickly result in failure for a budding small business. One thing to remember is that expenses will eventually pay for themselves as long as there is a steady revenue coming in. Individuals are advised to focus on costs, as well as sales in order to create a balanced, successful company.
Focusing on size: small businesses are referred to as "small" for a reason--they are their own entities, separate from large corporations. As your small beading business grows, you may begin to compete against larger companies in the same industry. However, recognizing that you are not in the same category can save you from needless distraction. Oftentimes, amateur entrepreneurs become intimidated by giant businesses that happen to be in the same sector, but the fact of the matter is they are not an identical breed. Small businesses are personalized and intimate, which makes them different from larger competitors.
A lack of funds: although this can often result in the downfall of small businesses and large corporations alike, entrepreneurs are especially susceptible to this type of failure because they are relying on themselves. Douglas Long, a management consulting firm owner, told CNN that he recommends to his clients that they have approximately three times more money than they think they will need to start up their company. There are many factors that can thwart a new small business without warning: the economy, pitfalls in the industry, natural disasters.
"The biggest issue that most entrepreneurs have is money--they're not properly capitalized," Long told the news source.
There are a number of places that individuals can find money to start up their small business: banks, private lenders and even the government. The U.S. Small Business Administration website has a number of sources for aspiring entrepreneurs who are interested in seeking government loans and grants to launch their companies.
Spending more money that you have: the Huffington Post reports that this is a common mistake made by many amateur entrepreneurs. However, it is an easy one to avoid: don't spend money that you don't have. Investment money accounts should not be depended on--instead, individuals should wait to make any other purchases until they have determined that they have enough money in their pocket. Small business owners should also wait until any existing charges have cleared before even considering another expense. This can prevent debt and future heartache for entrepreneurs who have dedicated their careers to this new type of employment.
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