Starting a new company is not a trifling matter. Here are a few missteps to avoid:
- Neglect the support of your relative: Before you embark on a start-up project, it is important to properly obtain the support of your family and spouse. Your success as an entrepreneur will be greatly facilitated with the assistance of their support, their advice, and their feedback;
- Going too fast in your business: Evaluate your business model, search for financing, find your first customers. These are all important milestones to not neglect. These steps can take up to 12 months, enforcing the importance of carefully preparing and have a solid financial nest to support this major change in your new life as an entrepreneur;
- Do not calculate your break-even point: It is important to assess the amount of revenues you will need to cover your fixed and variable costs. You need to know when your business begins to generate income to support your way of life. When you are an employee, we usually say that you need a 3-month cushion in case you lose your job. As an entrepreneur, you will need at least 12 months working capital to cover all your costs and your salary;
- Not to have your own office space: It is important to devote as much effort to your business start-up and isolate yourself from daily routines. It is possible to have your own office space at home, but is much better to get out and focus on your business plan. Space-sharing is an excellent option, which can allow you to isolate you in order to carry out activities related to your business. The cost might seem high, but the use of shared premises will also create new contacts, thus facilitating your business start-up;
- Be unruly: Discipline, discipline, discipline. Working alone, implies an iron discipline. It is very important you set daily targets, for example, top 10 most important things to do in a day. Keep a well balanced agenda (business development, administration stuff, quotes preparation, etc.). Make sure you cover all your important stuff in your daily work since it is vital so you do not forget things. Identify daily priorities and address them before the other tasks.
- Forget yourself: It is necessary to spend personal time after a good work day or week. Remember to insert in your calendar a couple period time of personal activities that will help you think about something other than work, i.e. physical activities, family time, reading, meditation, training, etc.
- Forget to invoice your clients: Faster you will generate income; the faster you will make your business profitable. However, it is not because you make a profit, you have money in your bank account. You must collect your accounts receivable on a monthly basis or your finance can be affected. For someone who gets into the business, getting paid quickly can be a difficult exercise, even annoying. It is important to understand that all work pays and that you do not have to feel bad to ask your customers to pay you. There are several ways to get paid: weekly, on milestones, with a down payment, forfeit package, etc. Never neglect the billing aspect of your business, because the tax man, your suppliers, and your subcontractors won’t forget to be paid;
- Control and monitor your administrative aspect of your business: Avoid accumulating paperwork, financial management, etc. Wait until the last minute will make you forget important things. Good management, among other things allows you to avoid penalties or interest. If you want to spend more time managing your business, or spend more time with your family and friends, feel free to do business with a professional accountant or likewise business service;
- Neglect your pension fund: Have on hand a good retirement pension fund. Set methodically money aside, to assure you a conformable retirement. In doubt, do not hesitate to contact your accountant to establish financial goals and retirement plan;
- Becoming poorer intellectually: Continue to keep to yourself inform, to participate in seminars, to train your brain. Be a member of an association or order or a chamber of commerce, training options are a great way to get our yourself trained, and make business contacts;
- Focus on prospects: In your start-up phase, spend at least 50 % of your time on prospecting for new clients. Even after making money, subsequently do not neglect this important aspect. You should at least spend 20% of your time (with follow-up meetings). Participate in activities where there is a large number of people, allowing you to have access to a larger number of contracts;
- Negotiate your price: It often happens that a prospect wants to negotiate your price, branding a competitor that is willing to accept such a product or service. In this kind of situation, it is highly recommended to not negotiate because it is too difficult then to return to your market price. If the prospect does not want to pay for the fair value of your product or services, it is not a client for you. If you accept, you might have to renegotiate every time you sell to this client. On the other hand, if you want to get a good lead, and the price is reasonable, you can always offer a discount on of launch, on volume, a forfeit price, etc.
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6DT Consulting 