For many, coronavirus spelled the end of their dream to own their own business. But for some, it was the perfect opportunity to get a fresh start, including the start of their own business. One person’s near-impossible challenge is another person’s irresistible opportunity. If this is the chance you have been waiting for all your life, dive in and swing for the fences.
That said, there are a few pitfalls you will want to avoid. Rushing in where angels fear to tread is usually not the formula for success. So before betting the farm on an impossible dream, be sure to avoid common pitfalls and transform the impossible to the highly probable. Here’s what you need to know:
Don’t Bet the Farm
Most truly wealthy people will tell you that the secret to success is to use other people’s money to make money. Leveraging is when you borrow to buy assets. This is how successful real estate millionaires made their money in the first place. Leveraging works for all sorts of business. Just know that it is not without risk. But the bigger risk is double-mortgaging your house to start a restaurant.
When you borrow, make sure it is enough to really get things moving. You don’t want to borrow half of what you need to be successful. Don’t skimp on the loan. It will take you a little while to become profitable. When starting a business, don’t use half measures when it comes to financing. Do it right or not at all.
Don’t Hire Your Best Friend
One of the biggest mistakes new Entrepreneurs make is making the wrong hiring decisions. If you want your best friend to stay your best friend, don’t use the business as a means to help your friends. If they couldn’t get hired at another company for the position you need to fill, you should probably not hire them either.
There are many hiring mistakes that are fatal to your business. You need to make sure the applicant is really qualified and not simply exaggerating on the resume. Actually take the time to check the references. Don’t ignore the warning signs like a poorly typed resume or poor personal grooming. You want a person who is calm, confident, and competent. If you don’t see those traits in the interview, they are not going to magically appear on the job.
Don’t Try to Market to Everyone
At some point, every business is going to make some marketing mistakes. The one you don’t want to make, especially at the beginning, is trying to reach everyone with your product instead of finding your niche and sticking to it. Face the reality that not everyone is going to buy your product or use your service. Once you understand that, it is easier to start thinking about who is most likely to want your product.
If you can’t easily explain who your target audience is, don’t open your business yet. It is okay to market to a small group of people that you can super-serve. In turn, these customers will be your most loyal and enthusiastic base. Once you establish that base, you can grow from there.
If you see opportunity instead of doom, good for you. Now, all you have to do is avoid the killer mistakes that can end your business before it has a chance to blossom. Secure sufficient capital up front. Hire the right people. And properly define and target your niche.