5 Most Common Business Plan Mistakes

Creating a business plan before diving into your new business head first will give you a much better chance of success. Here are some of the most common mistakes entrepreneurs make.

  1. Not writing a business plan

Not bothering to write a business plan is the most common mistake. Entrepreneurs tend to get too excited about their business idea and miss this important step in start-up. Maybe you are familiar with the saying, “He who fails to plan plans to fail.” Failure is the fate of almost every business someone starts without a business plan. You don’t need a full-scale formal business plan, but it is important that you have one.

  1. Not being clear about the purpose of your business plan

A business plan is your solution to the problem being how you are going to turn your business into a reality. Ask yourself why you are preparing a business plan. Is it to persuade a potential lender for a loan? To attract investors or to figure out if your idea could be a viable business? Or is your plan a blueprint for your start-up? The purpose of your plan will affect everything from the amount of research you do to what the finished plan will look like.

  1. Not doing enough research

Your business plan is only going to be as good as the research you put into it. You have to answer questions like; what are the trends in the industry? How will you counter what your competitors are doing? The more complete the answer is, the better prepared you will be. Every section of your business plan will involve research, which in most cases can be found online.

  1. Ignoring market realities

You can have the best product or service in the world but it’s not going to sell if there is no market for it. It is very important to market test your product or service. If you have a product, try selling at local venues or give out free samples to gather feedback. If you have a service, surveys and focus groups are effective ways you research your target market. Also examine what your competition is doing and explain how you are going to counter to win market share.

5. Not doing a thorough preparation of financials

There are two common mistakes people make when writing the financial section of their business plan. The first is not being realistic about expenses, people often underestimate costs. The second is being overly optimistic about your business prospects. Never let your optimism lead you to create an overly rosy cash flow. Meticulous research will prevent this mistake.

Perseverance and determination are great traits for entrepreneurs to possess, until those traits keep you from accomplishing what you should. That may be the worst business plan mistake of all.

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Five Common and Preventable Problems for Small Businesses

The first year of start-up and running a new business can seem like a never ending roller coaster ride. Here are some common and preventable problems you may encounter.

  1. Bad Business Plan – A detailed business plan, on paper, will initially help you set goals and keep them on track. If you need a loan or grant to get your business up and running, a business plan is necessary. Doing it right in the beginning will save you the headache in the long run.
  2. Inadequate Market Research – Before committing to your business, do your research. Canada Business Ontario is a free service that will provide you with statistics and demographic information that will be very valuable in determining the level of success your business may achieve. Then throw the idea around with friends and family to get a few different points of views. Be assured that people will buy what you are selling at the location you are selling it from.
  3. MONEY – Never make the assumption that your business will be a success right off the bat. It generally takes six months to a year to get your business off the ground. It is common for businesses to fail in not planning for a rainy day. Plan accordingly and don’t assume you will make millions the first year.
  4. Selling Yourself Short – Trying to compete with big box stores or competitor pricing is a sure way to go broke. You have to charge enough to cover all your expenses. Price fairly and emphasize the quality and unique aspects of your product or service. Providing superior customer service will keep customers coming back.
  5. Forgetting Family – Balancing home and business life can be difficult, but always make time for family no matter how many hours you work in a day. Stress at home will add more stress to your work life. Having support from your loved ones is important.

Although you may run into a few problems starting up, being prepared is half the battle.

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Employed or Self-Employed?

Why not both? Most people think it would be impractical to start a new business while still employed, but it is the perfect time. Working at your business part-time gives you big advantages.

Start Up Funding

When you start a new business, money is a common worry. Being employed elsewhere gives you comfort in knowing you have a job to fall back on if things don’t go as planned. It can take a while to gain profit from a new business, having the extra income will help take care of the bills in the mean time. Small business loans may also be an option, but they do have some restrictions to how the money is spent.

Client and Customers

Already being employed also you inside a network that is full of potential clients or customers. Although your boss or co-workers may not be interested in your product or service, they may know someone who would. Be sure to promote your business in a way that will not interfere with your current job or turn off potential clients. Make sure you have a 30 second elevator pitch prepared and practised so you are comfortable, then find the right time and place to talk about your business.

Try it out 

Running your business part-time means you don’t have to make the full commitment. You will have time to test the feasibility and practicality as well as testing the market. Business is not for everyone, the idea may work but you may find you are not the right person to implement it. Being able to do a trial run first can be a great advantage.

Starting up a part-time business before fully committing to it reduces some risks and gives you a better idea of the chance of success you will have. So what are you waiting for, give it a shot!

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Three Reasons to Choose Entrepreneurship

Being that it is Small Busniess Week, we thought we would repost the most viewed post of all time. We hope you enjoy this popular read!

Why choose entrepreneurship? It’s a personal and important decision that stems from critical thinking and answering numerous questions, many of which are outlined in ‘How to determine if Entrepreneurship is Right for me’.

There are many articles available online that describe the various reasons individuals choose entrepreneurship. Below three of the most common reasons are outlined:

Be Your Own Boss: Being your own boss allows you to enjoy what you do for a living and control your future. If you like to be in a position of decision making, being your own boss is an attractive career option.

Passion: In order for your business to be successful, you must love what you do. Being an entrepreneur is hard work, so being able to do what you are passionate about as a career may not seem like work. It will give you the chance to immerse yourself in something you love.

Independence: As much as you are the manager of every section your business, being an entrepreneur also grants you the freedom to design your own schedule. This can allow you flexibility not granted otherwise (ex. working from home).

It also gives you the freedom to choose who you work with and decide the overall operation of the business .

Are you thinking of entrepreneurship? Take our ‘Entrepreneur Quiz’!

Are you already an entrepreneur? Why did you decide to become an entrepreneur or open a small business?

For additional articles that outline top reasons for becoming an entrepreneur, check out the links below:

Five Reasons to Become an Entrepreneur
Top 10 Reasons to Run Your Own Business
25 Common Characteristics of a Successful Entrepreneur

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Tips to Reduce Business Costs

Reducing business costs is about making smarter choices when deciding where to apply your business funds. It doesn’t have to take a lot of time or effort. Here are a few tips to consider to make the most of your business revenue.

Use Technology - Technology allows you to save money and advance your business in ways you couldn’t five years ago. There are many ways to reduce business costs, from teleconference services to online payment services. Some other examples include; online business training, open-source software, and landline alternatives.

 Go Paperless - The cost of paper, ink, and other supplies can add up. Going paperless is a cost effective and an environmentally conscious decision. Being paperless means easy access to all your digitalized documents, making it more convenient to work from home.

 Market your Business Online - Online marketing is used to build a business’ customer base and to develop and manage a company’s reputation. It is an easy and cost-effective way to reach your target audience. Starting a business blog, creating a Facebook page, or listing your business on Google Places are all low-cost ways to get the word out about your products and services. Remember that online marketing is only one component of a marketing plan.

 Create a Business Budget - A budget will help you to assess the financial health of your business and will give you some control. Your business budget should include the money or sales revenue the business expects to take in and the money it expects to pay out for expenses. Putting it on paper will help you to identify unnecessary costs and potential savings. It is a powerful tool to improve your bottom line.

 Ditch your Landline - Telephone lines can be expensive and an unnecessary business cost. Using cell phones, VoIP and virtual phone lines can help reduce costs. VoIP targets small businesses with lower rates than landlines. It also allows you to make and receive phone calls via an online connection. Do your research to be sure this is a viable option for you.

 Alternative Place of Business - In many cases having a physical place of business is unavoidable, however, if you can downsize, your business costs will be reduced dramatically. Explore co working arrangements or converting to a home-based business.

Although change may not be easy, it is sometimes an alternative to becoming more profitable.

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Marketing Techniques Every Small Business Owner Should Consider

For your small business to succeed, you must be known by potential customers. Marketing will put your business on the radar, increase sales and help you gain a solid reputation. Here are a few valuable techniques to build brand name recognition;

Build your Email List – Email is a primary mode of communication for small businesses and also a great way to promote your product or services. Website sign-up, social media channels or even manually at your business location are easy ways to build up your emailing list. Provide an incentive like a discount, contest or sweepstake for customers when they sign-up. Also be sure to guarantee their privacy when subscribing and make it clear that their information will not be shared.

Get to know your Customers – Taking the time to get to know your customers is a powerful marketing technique. Understanding what your customer wants and needs will create more sales and referrals. Although you will have more than one customer to please, personalize their individual needs. Sending holiday gifts and birthday coupons or special offers is a great way to make them feel valued. A customer satisfaction survey is also an easy way to track results and improve your business to target your audience.

Use Social Media – Social media has become the most commonly used online marketing today; in fact customers now expect businesses to have a Twitter or Facebook page. It is an easy, cost-effective way to get the word out about your products and services. There are hundreds of social media sites to promote your business, some include; starting your own blog as well as subscribing to related blogs, posting videos on your Youtube channel, listing your business on Google Places, Pinterest and many more.

Give Away – Who doesn’t like free things? Giving away samples or freebies will attract new customers. Coupons as a thank-you for signing up for email subscription are also a great incentive. Some things to keep in mind when choosing a giveaway; the value of the item, is it high quality, relevant or useful to your customers, will it be a good representation of your business? If you are a service, donating your time and expertise is also valuable to your customers. Sponsor a local sports team, go to charity events, get your name out there, and take the time to promote your brand.

Go Grassroots – Promote your business on a budget the old fashioned way, on the street meeting and talking with people. Build support with your local community and businesses; join the Chamber of Commerce and professional organizations. Be sure to have business cards and your elevator speech ready to pitch to potential customers and supporters. Launch a strategic partnership with a complementary business or co-sponsor an event with a local business to get your name out there. Side-walk signs, hats, shirts, bags are also great ways to market on a budget.

Marketing is an everyday activity for business owners!

 

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Business Advice from our four-legged Friends

Dogs have plenty to teach us about business – From doing what you are passionate about to working with a strong pack, to seizing opportunities as they come. Here are five tips you should take from your canine.

Loyalty – Just like dogs are loyal to their owners, be loyal to your customers. Loyalty will create long-term clients that will return time and time again. Developing strong relationships that go beyond work and normal duties will ensure their return. Establish a vision of what is to be accomplished and it will pay off in the long run.

Do what you love – We love dogs because they love us. They radiate so much positivity which is a key to being successful. Surround yourself and partner with positive and optimistic people. Beingsmiling-dog passionate about what you do makes it much more rewarding, and will put you on the track towards more success.

Run with a strong pack – Dogs are pack animals, they learn from each other. Create a network of people you trust, peers that are right there in the trenches with you. Connect with those who share the same entrepreneurial drive. Cultivate a mentor that has experience and can give you seasoned advice. Establish and track goals with your support group, and learn from each other’s experiences.

Sniff out hidden opportunities – Whether they are chasing squirrels or begging for treats, dogs are opportunists. Running a business is tough but sometimes life throws you an unexpected bone, take advantage and seize opportunities when they arise. Always keep a lookout for new opportunities.

Live in the moment – Dogs are experts at taking things as they come. It pays to be flexible and responsive. The amount of time you take to respond to a question or complaint is the difference between keeping and losing a client. Be ready when an opportunity knocks. An unexpected boost from the media is an opportunity to connect with your audience and react in a proactive manner.

When business is going well you could say “it’s a dog’s life.”

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