We have all heard the inspiring stories about bootstrapping entrepreneurs, who defy the odds and launch successful venture with their limited personal savings and credit cards. Although I am a big believer in calculated entrepreneurial risk taking; I must admit to talking a few would-be restaurateurs away from the cliff’s edge in recent weeks. I have done this not because I doubt that successful businesses can be launch during a recession – they can.
I have advised certain individuals against pursuing restaurant launches recently, because they were headed directly toward the major restaurant start-up pitfalls that would have resulted in disastrous failures. Here are five common start-up pitfalls, that by the way, apply to any small business start-ups.
- Failing to plan properly: It is great when entrepreneurs have a crystal clear vision of their business floating inside their heads. However, launching a successful small business requires that the vision be put on paper. Writing a business plan allows entrepreneurs to test, verify, refine, and communicate all the aspects of their business vision, which is a necessary part of the launch process.
- Going it alone: The idea of the rugged all-knowing solo entrepreneur is a myth. The most successful business people surround themselves with talented mentors, professionals advisors, and allies. From attorneys to accountants to expert consultants and employees, smart entrepreneurs connect with the people they need to help realize their dreamslove it.
- Starting with too little capital: Investment capital is the oxygen for a start-up business. Without a sufficient supply of capital a start-up restaurant or any venture will die prematurely. It is critical to accurately project your capital requirements in the planning stage and to identify back-up funding sources if needed.
- Expecting immediate income: In light of the chaotic job market, many people are looking to start businesses as a source of income. Although small business growth will be a major part of our economic recovery and a source of income for small business owners in the long-term; most start-ups are not able to generate meaningful income in the early stages.
- Focusing internally: This last pitfall gets at the heart of why businesses are created. Your business should exist to satisfy the needs of customers. Although it is your vision, without customers it does not stand a chance of succeeding. This means that your business should be developed with a focus on the needs of your target customers.
Now if you are seriously considering launching your own start-up take note of these pitfalls. Starting, growing, and running your own business can be exhilarating and rewarding if you can navigate around such obstacles.