We’ve talked about how the “Stimulus Economy” is a great time to start a new business.
One of the reasons: Existing businesses in your desired market are likely to have downsized (ie: laid people off) or cut back on some activities, services or product lines that might not be their most profitable activities in some way, shape or form.
Perhaps they need a specific, expensive crew of staffers to deliver that service and while in flush times they can justify it, in the Stimulus Economy they cannot.
Maybe that means no one should do these things (or create them), but that’s an easy place to find product and service ideas. If nothing else, it might provide offshoots of those ideas that are even more profitable and worth starting a business around.
Armed with one of these new ideas (or new twists on the old ones), off you go to start a business.
Excluding the marketing, customer service and positioning things we talk about regularly…What are some of the expensive mistakes you can make?
Not following up
You’re new. You don’t have that many customers to begin with (maybe none). It should seem like common sense to keep up with them. If they start to wonder why you haven’t called, stopped in or replied to their email – it’s beyond “been too long”. Do you have a system – even if it’s on paper – for managing this process? You should.
Not hiring an accountant from the gitgo (ie: the beginning).
This seems like a luxury. The problem is that you make choices in the early days that can potentially haunt you a decade or more later particularly if you are wildly successful. LLC? C-Corp? S-Corp? Even that seemingly simple choice can make a huge difference depending on how your business is valued. Even if you only pay them now and then to do specific tasks, it’s critical to do some of these early things right the first time.
Not having a serious insurance person in your corner
In the early days, it’s not unusual to make mistakes. If you can’t avoid them, make them while being properly insured. When you talk to a prospective agent, tell them *everything* your business does and how you do it. Failing to mention that twice-a-year hayride at your guest ranch can be a one way express ticket to bankruptcy.
Not being organized
Part of this is included in the “Not following up” item and in the next one, but seriously – it’s 2009. If a yellow pad and a #2 pencil really is the toolkit for you to keep 100% on top of your business, that’s fine. Be sure to use it.
Emails, papers, phone messages, customer communications, invoices. It all adds up. A cardboard box in the corner is not the way to manage it. A two-foot-tall stack of manila folders that always seems to be scattered around the office isn’t either.
Not having a clear division of duties
If you have a small team in place, it’s easy to assume everyone knows what to do. Trouble is, that might work for 1 customer or 3 customers, but if you have 57 leads active – its impossible to keep things under control and know who is doing what and when. Result: Lost business. Lost prospects. Angry staff.