Business Success Can Be Yours If You Avoid These Critical Mistakes

So, you’ve decided to start your own business. What are your motivations for doing so? Perhaps you have an innovative product or service that you think might be the “next big thing” that takes the world market by storm. Or maybe you’re so tired of being an employee – you hate your boss, can’t stand your colleagues, don’t believe in your company’s goals – you think it’s time to leap into entrepreneurship. Or perhaps you’ve been laid off and feel that not being able to find a job in this economy is forcing you to start a business.

Whatever your motivation may be, you now work for yourself. Yet starting a business is the easy part. In America, the Small Business Administration states that an estimated 627,200 businesses were formed while 595,600 businesses ceased during the same period. Rather grim statistics, you might think. The question is: what can you do to ensure that your business is amongst the ones that survive and thrive?

These are the 5 most common mistakes that business owners make, and what you can do to avoid them.

1. Expecting Quick Success

It’s easy to be attracted to the idea that we should be successful if we’ve invested some time, money and energy into a business. For example, placing one advertisement for a workshop and expecting many people to sign up. Or investing all your savings in setting up the business, and thinking you deserve some clients as a result. When quick success doesn’t happen, self-doubt arises, taking a stab at much-needed confidence, and causing you to lose faith and patience in your business.

When asked what it takes to be a successful entrepreneur, Norm Brodsky, a veteran business owner who has started and sold several multi-million-dollar businesses, replied, “The most important quality is resilience”. He was referring to the ability to bounce back from failure, to turn around a bad situation, and to profit from your mistakes.

This mistake can be avoided by taking a 360-degree look at the steps needed to grow your business, implementing a well-researched plan, and having enough financial reserves that lasts at least 18 months when you start a new business.

2. Not Applying Sales & Marketing Fundamentals

Do you have a negative reaction to the word “sales”? Many entrepreneurs dread sales and marketing because of old mental images of “snake oil peddlers”- people who can convince others to buy things they don’t need. Entrepreneurs do not want to be perceived as the salespeople who are manipulative and out to rip people off.

While this is a common perception of sales, the truth is, nothing happens until a sale is made. As such, the first fundamental is to have a healthy mindset about sales and marketing.

Other sales and marketing fundamentals like having a target market, knowing who your ideal client is, having a sales process, the 80/20 rule [that 20% of your marketing activities will generate 80% of revenue], the 7-touch-or-more process prospects go through before becoming a customer, the need to have a marketing plan, the necessity to invest at least 10% of revenue in continued marketing, may seem run-of-the-mill. The truth They are applied in businesses that succeed, and are absent or sporadic in those that fail.

Some successful entrepreneurs may even go so far as to say a business owner’s main business is marketing, and not the product or service they are offering. While you might not agree with this view, the point is: constantly exploring new marketing methods, testing them, repeating what works and discarding what doesn’t, will ensure your business’s survival.

This mistake can be eliminated by attending any variety of Sales & Marketing 101 type seminars, really weaving the fundamentals into your business, and continually testing marketing methods. And as always, strategies you’ll learn work only if you work them.

3. Not Knowing Or Owning The Reason You’re In Business

Because the barriers to entry in most businesses are low, many people go into business without really connecting with why they want to be in business in the first place. Perhaps they want to get rich quick, or they were downsized, or they had a life transition [e.g. from being a professional to a stay-at-home-mom], or they have the mom-and-pop corner store mentality (if mom and pop could succeed then, I can do it too).

Seduced by the lifestyle possibilities of the new business, some business owners may neglect to see if the business is truly aligned with their passion and values. Prospects will sense the lack of passion or authenticity in what you do even though you don’t articulate it. What’s more, in the highly sophisticated, fast-changing world we live in today, it takes real passion in your products and services to sustain you and your business through the ebbs and flows of business cycles.

This mistake can be abated by getting clear about your passion – what do you really want to do with your business? What are your values around how you will conduct business with the world? Know how and why you started your business and embrace the reasons. If possible, convey them to your customers.

4. Not Mastering The Mental & Emotional Game

If running a successful business were as easy as knowing what to do and doing them, why aren’t there more successful business owners around? It’s usually because we haven’t mastered the inner game of winning in business.

To win, you must be aware of the types of behavior that are self-sabotaging, deal with them and hold on to your vision till the finish line. At the same time, you must continually nourish yourself by connecting to your belief in the success of your business, and truly owning the positive difference your business is making on the world.

An example of self-sabotage is the inability or refusal to learn from your mistakes. It’s the tendency to repeat self-destructive patterns of behavior even though you repeatedly end up being bumped in the head. For instance, an entrepreneur I worked with was close to shutting his business down, because like the previous business he started, he didn’t embrace sales and marketing, and let sales dwindle until it was too late.

This mistake can be eradicated by having a good mentor or business coach and having him or her assist you in uncovering your blind spots and developing an unstoppable mindset. “You can’t see what you can’t see” is the reason sports legends like Lance Armstrong and Michael Jordan work with their coaches. You are taking on the challenging yet rewarding entrepreneurship game after all, and you deserve all the support you can get.

5. Going Solo

The journey of entrepreneurship is not for the faint-hearted. There are many roles to be filled (salesperson, marketer, manager, bookkeeper), and these roles involve risk-taking and a tremendous amount of energy and time.

While the business owner has to wear several hats, the tendency is to do everything yourself. Before you know it, you don’t have enough time to socialise or spend time with your family, and you become more and more isolated. Your business becomes your life. You are tired. And you become tired of your business.

What’s worse, many entrepreneurs do not accept the help they can get because they think no one else knows their business better then themselves. After all, they started their business in the first place so that they could do things their way! They have allowed their ego to get in the way.

This mistake can be remedied by outsourcing certain functions like accounting or website development. You can get out of isolation by joining mastermind groups for entrepreneurs, where you can exchange ideas, and ask for feedback and support. You can also create your own Board of Advisors, where you invite established professionals or business owners to mentor you.

Eight Steps To The Next Level – The Business Plan, “The Engine of Small Business Development”

This is the second of a series of articles describing how small business owners and managers can drive their business growth and profitable development through the creation and implementation of a business plan.

I know the prevailing view among many small business people is that “planning” is for the larger, more substantial business and “they are too busy running their business to have time for planning”. Indeed, many small business owners are “too busy” running the business, but they ignore, at their own peril and survival, that “failing to plan is planning to fail.”

I am convinced that the small business owner will benefit from engaging in this business planning process because of the nature of carefully examining and thinking through the way their business competes and operates; – and how that will align with their determination of “what business they want to be in”.

This business planning process yields a stronger, more profitable business which provides real value to its customers and the marketplace.

The business planning process described in this article is the most logical, pragmatic and practical examination possible of the small business. This process is far from arcane or mysterious, but totally focuses on the reality of the small business environments (the business, the economy, competition, customers’ needs, wants and desires) as well as the determination and allocation of the firm’s resources).

Business Planning Process – Eight Major steps

For the past thirty years, I have successfully used the following business and strategic marketing planning process. The following process consists of eight major steps which are sequential and continuous. I will describe the nature and function of each of these steps.

This process applies to all types of organizations; regardless of size, products, services, or industry…. I have even used this process with a national religious organization.

1. DEVELOP MISSION AND POSITIONING STATEMENT
2. SITUATION AUDIT
a. Internal
b. External
3. WOTSUP ANALYSIS
4. MAKING ASSUMPTIONS
5. DEVELOPING OBJECTIVES
6. STRATEGY DEVELOPMENT
7. SPECIFY TACTICS AND ACTIONS
8. PREPARE FORECASTS/BUDGETS/FINANCIALS

1. MISSION AND POSITIONING STATEMENT

With respect to the definition of your businesses’ purpose and mission, there is only one focus, one starting point; it is the customer or user of your products/services. The user defines the mission of any function or business. The question “what is our mission or purpose” “what business do we want to be in?”, can therefore be answered by only looking at your business from the outside, from the point of view of the customer or potential customer. What the user or customer sees, thinks, or believes at any given time must be accepted by your business management as an objective fact to be taken seriously.

By definition, the customer is purchasing the satisfaction of a need or want.

For example, here is a well-known and real example of a business mission which defined the way in which that company conducted its activities.

A drill bit manufacturer defined its mission as determining “what size holes customers need” their focus was directly on customer needs and not on their product specifications. They were customer-focused and very successful.

Once the mission statement has been completed develop the positioning statement for competitive advantage and prepare the USP – your unique selling proposition. “Why the business is able to provide more effective solutions and greater value than the competitors.”

2. THE SITUATION AUDIT- Internal and External

The situation audit is a description and analysis of past, present and future data (information) which provides the basis for pursuing the business planning process. It is an organized method for:

  • collecting pertinent information
  • interpreting its effect on the business’s environments (market conditions)
  • analyzing significant trends
  • projecting all pertinent factors, which could influence company activities.

3. WOTSUP ANALYSIS

The acronym WOTSUP stands for Weaknesses, Opportunities, Threats and Strengths Underlying Planning. This step flows naturally from the fact base (Situation Audit). The Weaknesses and Strengths constitute an internal analysis, i.e. “what are we at good and bad at?”-

Opportunities and Threats, on the other hand, form an external analysis. From this analysis, objectives can be formulated with specific action plans designed to overcome weaknesses and threats by exploiting the business strengths and opportunities.

4. MAKING ASSUMPTIONS:

Assumptions make planning possible. Without the use of assumptions, planning would be almost impossible. Since planning deals with the “futurity of current decision-making” and events in the future are almost impossible to predict with unfailing accuracy; – assumptions make planning possible.

5. DEVELOPING OBJECTIVES

Overall objectives are the real crux of the Business and Marketing Planning Process. They deserve every last ounce of time and effort – often frustrating. The objectives form the umbrella under which the balance of the whole planning structure is built. Because of the key role they play they must be thought through and be expressed in the most specific and concrete fashion. In simplest terms an objective is… “what do you want to accomplish?” Objectives are prepared to overcome weaknesses and threats developed in the WOTSUP Analysis and to exploit the opportunities and strengths.

6. STRATEGY DEVELOPMENT:

Once the objectives have been developed, the preparation of strategies is the next step in the process. Strategies, must explain, in a broad sense, how the objectives will be achieved.

7. SPECIFY ACTION PROGRAMS:

After the objectives and strategies have been developed, describe the work to be performed. The actions must be very specific; what work is to be done, by whom, how and when.

8. FORECASTS/BUDGETS/FINANCIALS PREPARED:

The action programs when completed form the basis for budget preparation. The cost of each action and the revenues derived from the detailed actions generate the operating budget and cash flows for the Business Plan.

Many organizations confuse planning with budgeting. One important purpose of the budget is to ensure the business has adequate financial resources to function. Budgeting is about not failing, planning is about what is possible.

Buying Or Selling Your Business in the New Year – How is Your Sales and Marketing Plan?

The sales and marketing plan is a document that most entrepreneurs don’t have time to get around to putting together. I’m not sure why that is as it’s just as important as the business plan and indeed complements it.

The business plan outlines the vision, strategic direction and business and financial goals of the business. The sales and marketing plan breaks down the business plan to show how you are going to get there and the tactics to be used to attract the customers it needs.

The sales and marketing plan can be as complex and as detailed as you wish to make it. It can include a list of tactics you could deploy, it can list and detail only specific tactics you plan to use or a combination of both. It’s important, though, that you understand how each idea is to be used but you have some idea of the expected results each tactic should bring to the business. There is an old adage in business management: If you cannot measure it you cannot manage it. There is also a famous quote that says “I’m convinced that 50% of my marketing is effective, I just can’t tell which 50%.”

There is also another saying that says “I can’t afford to advertise.” If you cannot afford to advertise then you probably cannot afford to be in business.

Some of the key items you want to see in your sales and marketing plan includes a profile of your typical current customer, what percentage of business they bring, where they come from and how they found you. If you are planning on growing the business by either more of the same type of customer or a different customer demographic, this needs to be defined, measured and made sure it makes good business sense to target. Sales and marketing should always be seen as an investment and just like all other aspects of your business, needs to bring a return that you measure or you need to go and try something else or adjust your sales and marketing plan.

If you are looking for different sales and marketing tactics there is simply no shortage of them. Here are a few suggestions. Each one needs proper consideration and research to make sure it’s the right strategy for your business. These tactics include obvious things like your business cards, office letterhead and stationery, email signature, coupons or flyers as well as things like your website, blog, monthly electronic newsletter, networking, taking someone out to lunch once a week, social networking media such as FaceBook, LinkedIn and Twitter. Other strategies could include TV advertising, seminars to educate customers about your service, trade shows, hiring a Public Relations expert, joining local associations such as the Chambers of Commerce or other local business or trade association groups.

Just like your business plan, the sales and marketing plan needs to be a living and breathing document. It needs to include projections and just as importantly, the results from any activities undertaken so you can tweak and constantly improve what you doing. And don’t forget your sales and marketing plan should include how each person in the business answers the phone right through to the book-keeper. There is no reason your book-keeper and clerical staff cannot answer the phone and offer a monthly special to see if they can bring in new business. It’s a little unconventional but sales and marketing is about getting results, not whether something is conventional or unconventional.

Part 6 of this article series looks at how the Business Plan and Sales and Marketing Plan are tied together with a Communication Plan.