You’re ready to start your first business. You have probably thought of a million things you need to do to open the business but unless you have been there before there are five things you won’t know that will trip you up.
Everything Costs More Than You Expected ~ You have probably been working on a business a plan that includes forecasts for revenue and expenses. It looks great and you can clearly make this work. Probably not. Most first time entrepreneurs under forecast their expenses and over project their revenue. When you are projecting expenses multiply what you have put in your initial plan by three to five times to get a realistic idea of what your expenses will be. Are your revenue projections still covering expenses? If not you need to do some more prep work.
Everything Takes Longer Than You Expected ~ Similar to the last point you are probably being overly optimistic about when you can expect to be making money. There are numerous hidden things that can delay your launch and early sales. These unforeseen delays can really impact your business because many of the expenses will still occurring and you will have no revenue to cover them.
Your Plan Will Change ~ I don’t care how much research you do on your prospective market until you start talking to customers you don’t know how they will react to your product. It is critical that you learn from these experiences and be flexible. Stubbornly holding to a strategy that isn’t working is a recipe for disaster. You can stay true to your vision, mission and passion and still adjust your course as you go.
Use Your Own Money As Long As You Can ~ Because of my background in banking and venture capital I get a lot of people talking to me about how to get money for their business. My first question to them is how much of their own money are they putting into the business. That isn’t usually what they want to hear but if you want to maintain control of the business don’t take someone else’s money until you can do it on your terms. Bootstrap the business until you can negotiate from a position of strength. When you build something the market wants the money will follow.
Don’t Get In A Hurry To Start ~ You know that position of strength thing I mentioned in the last point, you get there by being ready to be successful. Understand your market, your customers, your expenses and revenue projections so that once you open you can do business and not worry about where your next dollar will come from. Make sure your business and personal bills are covered even when everything takes longer and costs more than expected.
So now you can open because you know the secrets. You have the “been there done that” information that first timers don’t have. All you have to do now is make money and you are ready for that.