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Starting a new business is an exhilarating and scary step across a line that non-entrepreneurs will never experience or understand. It’s a bit like going solo if you trained as a pilot. Suddenly there is nobody to back you up, nobody to rescue you, nobody to ask. It is the most incredible sense of achievement and excitement, and a bit frightening too. You can create in the corporate world but there is something special about creating a new enterprise that moves the sense of satisfaction into a different league.
The pointers below are there to help new entrepreneurs to reduce their risk and increase their profitability and enjoyment. And to avoid tripping over things that have felled others – I trust they will be valuable.
• Be passionate. If you believe you supply goods and services that are really great, and you love what you do, you reduce your risk and improve your enjoyment.
• Don’t be a ‘me too’ business – If you are just another supplier doing the same as many others around then you are likely to struggle. Be different.
• You will get scared. You will worry you won’t make it, or be afraid you are not good enough. You will be tempted to give up. Get used to all this, it keeps you sharp.
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In an economic downturn, as the world experienced recently, many small business owners react in peculiar ways. They will tell anyone who will listen about how bad times are while ignoring the depressing effect these words have. While they are usually skilled decision makers they often panic and retrench skilled staff, cut back on customer support and otherwise cut costs but have no plan to review these changes in the future. They avidly read case studies of businesses that have found a wonderful solution to their plummeting sales and therefore become recession proof; and then desperately try to find a similar ‘magic wand’ answer for their own business.
Some operate in the hope that the bad times are a temporary blip on an otherwise smooth growth path; an inconvenience which will disappear soon. They believe that at worst it may mean retrenching a few unwanted workers. They will prepare highly optimistic forecasts for the future, anticipating that ‘things will get better’ in a few weeks or months time.
A better way
There is a better way to weather these bad times. But first the small business owner has to face a few facts: Continue reading
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It has become fashionable to discuss only business plans in the entrepreneurial environment. The marketing plan should be incorporated within the business plan, but many business plans provide only a cursory look at marketing. One reason is that many business plans are produced with the sole purpose of gaining finance for an enterprise, and so the focus is on financial projections, staff required and management experience. Once the finance has been secured the plan can be buried with all the other tiresome paperwork.
This is sad, because my belief is that most entrepreneurial failures and businesses in difficulty arise from one simple fact – they do not sell enough! And many times the reason that they do not sell enough is that their marketing and sales is unplanned, and poorly funded, the salespeople are insufficiently trained and the person responsible for marketing lacks either knowledge or clout or both.
As Dwight Eisenhower famously said “Plans are nothing, planning is everything”. The process of marketing planning will force research and debate and question assumptions. It will point to the need to set aside budget and train people. And it will link performance to actions.
Even with a carefully thought out marketing plan there is still a risk of the plan not having the desired effect. In my experience the failure of marketing plans comes from some or all of the following: Continue reading