Planning a Business

Once you have decided that you have a viable business idea, the next step is planning how you will build it. Planning gives you a more detailed understanding of what is involved in starting your business. A clear picture of the market you will be entering, who your customers are, who your competition is, and how much it will all cost are only a few of the details that will be illuminated in the planning process. Here we will outline two of the most popular ways in which entrepreneurs plan their businesses: the Business Model Canvas and the Business Plan.

It is important to remember, however, that the planning process is an ongoing activity. You will soon find that the way you imagine your business now will be different as you get deeper into the planning process. The idea will evolve and change as it becomes something more tangible. Change is an inherent aspect of business no matter if the business is just being launched or has been around for several years. Your ability to adjust accordingly can mean the difference between success and failure. A periodic review of your plan is recommended as many dynamic factors are at play in the business environment. 

Common Mistakes

The process of starting a business is a personal and emotional experience. For this reason, it is sometimes difficult to objectively make decisions and projections. Below is a list of common mistakes entrepreneurs make when writing or talking about their business. These can also happen when you are concerned that your business does not look attractive on paper.

• Overestimating the positives and underestimating the negatives: Those familiar with reading business plans will recognize when the numbers related to sales, revenue, and a product/services’ market acceptance are overestimated. This often happens because the entrepreneur believes in their business so much that they are unrealistic in how quickly they will achieve success. Monetary and time costs involved in running a business tend to be underestimated due to lack of understanding.
• Hiring too soon: Some startups burn through cash too quickly because they hire a large staff prematurely. Starting your own business is a lot of work and you will have to wear many hats in the first few years of operating. When a task is beyond your capability, it is more cost effective to hire an independent contractor to get the job done. 
• Failing to invest in people: When your business reaches the growth stage, it will be necessary to hire more staff. Some employers make the mistake of paying their employees too little in order to save money. This approach is likely to increase turnover and costs. You will receive a higher quality of work and more loyal employees when you pay them well. Access Occupational Employment Statics and wage data in your area to determine hiring conditions and appropriate wages.
• Launching your product too slowly: Don’t spend an inordinate amount of time developing your product before launching it. It does not have to be perfect; it has to function properly. As time goes by and more people use your product, you will get feedback that will allow you to upgrade your offering in a meaningful and valuable way.
• Not being adaptable: All business environments change. Some change more quickly than others. You must be aware of your market conditions and be willing to change your business model if the conditions require it. If you do not change in the midst of a changing environment, you are likely to go out of business.
• Listening to too much feedback or not listening enough: Feedback can lead you to success or be the cause of your failure. It is important to listen to feedback, but you have to keep in mind that you are not going to please everyone. When you try to give everyone what they want, your offering becomes too complicated and no one will end up liking it. It is also vital for you to develop relationships with a few experienced mentors who can guide you when you have questions.
• Not investing in marketing: This is an issue for both some new and some established businesses. Investing in marketing is often seen as a waste of money because either business owners do not know how to choose the appropriate marketing channels and measure effectiveness or they think that their product/service will sell itself. Some online marketing outlets are free and very effective.
• Cash burn: Keep a budget and monitor your cash inflows and outflows. You must ensure that money is being spent on the basics of what you need. If you run out of cash, you will go out of business. 
• Don't quit your day job: Many people decide to quite their job as soon as or soon after starting a business. This is not always advisable since your business will not make a profit for at least a year and you will be plunged deeper into debt.
• Selling online: If you have a retail operation, you should consider selling your wares online. Over 80% look for businesses online and people are increasingly making purchases online. Online sales may not be appropriate in all cases, but it is worth considering. 

​SOURCE: 9 Biggest Mistakes New Entrepreneurs Make found in Inc. Magazine.