Showing posts with label STEVE STRAUSS. Show all posts
Showing posts with label STEVE STRAUSS. Show all posts

Sunday, March 14, 2010

4 start-up mistakes you must avoid By Steve Strauss for USA TODAY

Q: Steve – I have been watching the start-up series you are part of at USA TODAY. I was wondering if there are any typical mistakes that you see start-ups make that I can avoid. I am new to this entrepreneurship thing. Thank you — Asa

A: It is never fun to make a mistake in business, even if they are inevitable. And worse, mistakes are both more prevalent and more dangerous during the start-up phase of your business because your idea has yet to be fully cooked; the start-up period is, unfortunately, usually the 'error' part of a 'trial and error' phase for you business.

That said, even though mistakes are to be expected, they need not be crippling, or even negative. Not a few entrepreneurs have stumbled into success when they discover ways to make money in their business that they didn't know were possible. For instance, Dr. Spencer Silver was trying to create a super sticky glue for his employer, 3M, when he mistakenly came up with an adhesive that was instead sort-of sticky. What to do with somewhat sticky glue? 3M created the Post-it note, that's what.

So no, not all mistakes are bad mistakes.

But there are some mistakes that can and should be avoided as you start your business:

1. Taking on too much debt: Most entrepreneurs have to take on some debt to fund the dream. That is expected and fine. But you simply must 1) keep that indebtedness to a minimum, and 2) have a plan for paying it back from the get-go.

It will take a while for that new business to begin to generate revenue, and while that happens your debt load will increase due to interest. And the bigger it grows, the more it threatens the lifeblood of your business, your cash flow. Keep your debt low and get out from under as soon as possible.

2. Having no marketing plan: As I am wont to say, starting a new business is like being alone in a dark room – you know you are there but no one else does. The only way to turn on the light, the only way to get people to know you are out there, is through marketing and advertising.

It need not be expensive. There are scores of ways to get the word out without breaking the bank – everything from tweeting to flyers to creating a viral video can work. In fact, over at my site,, I offer a webinar called Marketing on a Shoestring (click "Webinars" on the homepage).

Market and advertise your business, and then do it some more.

3. Not choosing well: This may sound a little amorphous, but it's not – it has to do with looking before leaping, and that is always a good idea in business. For instance, some people get so excited about a business idea that they don't really stand back and give it the proper, objective analysis they should. .. and then, for instance, they are surprised that the rent at their store in the mall makes turning a profit quite challenging, or that this franchisor is hell to work with.

Other examples of not choosing well include:

•Partners: Before going into business with someone, do a project or two together. See if your styles are compatible. See if you think about money and growth the same way.

•Vendors: A contract with a bad vendor can doom your business.

•Bad location: It could be too expensive, or maybe it is too off the beaten path.

Choose wisely, grasshopper.

4. Not having a great team: There are 20 million businesses in this country that are one-person endeavors – solo practitioners, freelancers, independent contractors and so on. That is all well and good, but it still does not mean that you have to be totally on your own, and you shouldn't be. The problem with being too independent is that there is not another person around to give you feedback and share the work.

So the important lesson here is to take advantage of the help that is out there:

• The Small Business Administration (SBA) and its Related Small Business Development Centers (SBDCs) offer tons of no-cost and low-cost counseling and seminars.

• SCORE does this too.

• Business schools need businesses with which they can place interns.

• Part-time employees can be hired inexpensibvely.

• Business associates can become an informal board of advisors. Other entrepreneurs can become part of your mastermind group.

Mistakes may be inevitable, but these ones are not.

Tuesday, January 12, 2010

Five Startup Mistakes to Avoid By STEVE STRAUSS

Because the new year often brings with it fresh optimism and thoughts of running your own show, leaving the rat race, or even making money from a hobby, I posted below a great Q & A on what to avoid when you contiplate starting your own business...great information here! If you would like to add a comment regarding something YOU wish you had known when you first started out fee free!

Sharon LaMothe
LaMothe Services, LLC

Q: I really have no choice but to start a business as I have been out of work for too long. I'm excited about getting going but what should I be on the lookout for -- what mistakes can I avoid? Ed

A: This is a good, smart question. While it is true that small business owners tend to be an enthusiastic, optimistic bunch, that same enthusiasm can be a hindrance when we think that all of our ideas are great ideas.

They're not.

Here, then, are the 5 Most Common Start-up Mistakes (and how to avoid them):

5. Not looking before leaping: Sometimes you have to jump right into a new business -- an opportunity presents itself, the time is perfect, whatever. But far more often you do not have to dive in headfirst (and you should not).

Take a breath, slow down, stand back, and take a critical look at your venture before investing too much time or money.

- What could go wrong?

- What part of your plan is weakest?

- What if things don't go as planned?

- What's the deal with your competition?

This sort of critical analysis will serve you well. It can help to point out danger signs and potentially save you from making an expensive mistake.

4. Starting with the wrong legal structure: No, there is nothing juicy about this tip, but it is vital nonetheless. Most small businesses start out as sole proprietorships. Most small businesses are making a big mistake.

Legally speaking (and I can say that as I am a "recovering attorney"), a sole proprietorship offers you no protection. If something goes wrong with the business, you personally are on the hook. But if you incorporate, the corporation is a separate legal entity from you. That is a main reason why people incorporate or form LLCs.

3. Lack of a marketing and advertising plan: When you start a new business, it is like being alone in a dark room -- you know you are there, but no one else does. The only way you can turn on the light and let people know you are out there is by advertising and marketing your business.

Read some books about marketing (my book, The Small Business Bible, might be a good place to start). Take some online courses. But trial and error is, unfortunately, the best teacher in this regard. Market and advertise your business, and then do it some more.

2. Undercapitalization: Yes, it is true that most start-ups begin with less than optimal funding, and yes, it is also true that many small business have overcome that obstacle, but it is also true that you will have a far higher likelihood of success if you have enough money to start properly.

How much?

At least enough to run the business and live for six months, while you get established. You simply don't want to be forced into having to choose between paying the rent and running the ad as you are trying to get your business off the ground.

And the #1 preventable start-up mistake is...

1. Having no website or a bad website: Your website is your business card in this century. One of the first things potential new customers will do is Google you and look for your site. Having no site, or maybe worse, a bad site, can kill your nascent business. And since it is so easy to get a professional site these days for next to nothing, there is no excuse for not having a great site, right from the get-go.

(Runners up: Not having a social media strategy, not being passionate about your choice, or failing to take advantage of all the free help out there.)

Steven D. Strauss is one of the country's leading small business experts. The senior small business columnist, his latest book is the Small Business Bible. A lawyer, author, and public speaker, Steve speaks around the world about small business and entrepreneurship, including a recent visit to the United Nations. He has been on CNN, MSNBC, ABC, and The O'Reilly Factor among many others, and his business column, Ask an Expert, appears weekly at .