Every second employee thinks about opening his own business, but a little more than 20% decide on real actions. Moreover, half of those who nevertheless started in business lose interest in own business when faced with the first difficulties. We have counted ten typical mistakes of novice entrepreneurs that prevent your dreams and ambitions from being realized.
Mistake One: Unjustified Expectations of Easy and Quick Success
It seems to many aspiring entrepreneurs that as soon as they start their business, everything should go like clockwork: sales will begin, suppliers will line up with tempting offers, all problems with government agencies will be resolved by an accountant or lawyer, and competitors will quietly disappear from the market. This is not at all the case, so a businessman must be prepared for difficulties and disappointments.
Practice shows that for some reason people are ready to make much more efforts to build a successful career in someone's business than to develop their business. Remember how much effort and time it took you to get your current position? Years of study at a university and additional courses, internships, learning the rules of working in a team and communicating with superiors, continuous development of professional skills, etc. Why does owning a business seem easier?
But instead of one boss, an entrepreneur will have at least ten: buyers, clients, government bodies, suppliers, landlords, etc. You will need to be able to interact with all these people and structures, understand their goals and needs, and fulfill your obligations. So running your own business is no easier than working for someone, although the difficulties in it will be of a different order than in a hired job.
Mistake #2: Not having a plan of action
Business is like a car, by itself it only rolls downhill. If you have no idea what exactly you should do and what the client or buyer will pay you for, then it’s too early to start real actions. Study all available information related to your business: business plans, books and articles, franchisor offers, real cases, etc. If you have the opportunity to at least temporarily work in a company operating in the direction you have chosen or adjacent to it, then be sure to use it.
As a user, you can get our books on the development of various business areas: retail store, beauty saloon, wholesale, Cafe. Preparing to post a book on opening law firm and online store.
To common mistakes business planning includes:
- lack of clear goals in the form of specific figures for sales and profits and the timing of their achievement;
- unclear distribution of areas of responsibility between partners or employees;
- understatement of estimated business expenses;
- too optimistic figures of expected incomes;
- choosing only one option for a business development strategy;
- lack of plan "B", if the original plan "A" for some reason cannot be implemented;
- underestimation of entrepreneurial risks and activities of competitors.
The other extreme is the desire to work out the plan to the smallest detail, in order to protect yourself from all possible difficulties. Unfortunately or fortunately, no one in business can guarantee you anything. You should become accustomed to working in unpredictable environments, but your competitors have to work in the same conditions. In addition, unpredictability is not always a bad thing, believe that life can present an entrepreneur with pleasant surprises.
Mistake three: misunderstanding your target audience
Another mistake of novice entrepreneurs is a misunderstanding of their target audience. There is a category of businessmen who want to do only what they like. For example, you are into slalom and want to open a mountain equipment shop. But think about it - are there enough solvent buyers in your locality who are interested in such goods? Maybe you should open a sporting goods store with a much wider audience, and sell mountain equipment, since you really like it so much, to order?
Ask yourself these questions:
- Who are your customers and clients?
- What are their needs and income levels?
- How many customers and clients can you serve?
- Which average check ready to leave your buyer?
- How often does a consumer need a similar product or service?
- What is the saturation threshold in your niche?
Focus not on what you can sell or offer, but on what your consumer needs and is willing to pay for.
Mistake #4: Not Selling
Any business is sales. You will make a profit only after you can satisfy the needs of your customers or customers. But the benefits of your service or product must also be conveyed to the consumer. Think about what advertising channels you will use and what marketing techniques you will use. If you have opened a store in a popular mall or provide in-demand services, then advertising costs can be minimal. Nevertheless, it is necessary to think about how you will advance in the market.
Mistake five: inability to manage money
Experience shows that the easiest way to start a business is not to waste your own money, but someone else's investments or loans. If you have a solid start-up capital, then immediately there is a temptation to spend it "for the good of the cause." Some start-up entrepreneurs (although there are fewer of them every year) are too fond of business attributes: an office in a prestigious location, expensive company car, a corporate website with an individual design, etc. As an excuse, the fact is given that such expenses are the formation of an image and reputation, without which there is nothing to do in a serious business. In fact, start-up capital should be spent on organizing the first sales, building a customer base, improving the quality of a product or service, establishing business relationships.
Experienced businessmen advise beginners to start with minimal or no capital. Do not immediately aim at some grandiose projects. Try to get at least modest amounts from the provision of services to start with, or integrate into the chain of wholesale and retail sales as an agent. Nothing can replace your own experience in earning income on your own.
The mistakes of novice entrepreneurs in the management of finances are not limited to the inept spending of start-up capital. As soon as the first money from the business appears, there is a desire to spend it on personal needs. Still - after all, this is honestly and independently earned income, why not buy on them new car? It is especially easy to succumb to such a temptation for individual entrepreneurs, because for them there are no legal restrictions on the use of money received from the business. As a result, they leave for personal purposes working capital, and further business development plans are not being implemented due to lack of finances.
Mistake #6: Ignoring Your Competition
If you have chosen a profitable line of business, then you will definitely have competitors. And, of course, a part of the market will be occupied by those who started before you, invested their money and efforts and expects a certain profit. The presence of competitors should not immediately stop you from starting a business, but you cannot ignore them either. To understand how competitive your chosen niche is and how you can stand out, you can order a market research or conduct a quick analysis yourself. An example of such an analysis when opening a beauty salon can be found in our book, it is available at personal account user.
Mistake seven: lack of special legal knowledge
An entrepreneur must know well not only his product or service and methods of their promotion, but also have at least general idea on the laws governing business activities in Russia. To help you understand the basics of this knowledge, we have prepared a series of articles for you, which we highly recommend reading:
In the process of activity, you will gradually begin to understand these issues, but at the start of a business, the mistakes of novice entrepreneurs when choosing a legal form, tax regime, registration of employees and relationships with partners can lead to serious financial losses and even become fatal.
Mistake eight: inability to delegate authority
“If you want everything to be done well, do it yourself!” - this phrase has ruined more than one startup. What happens if an entrepreneur believes that no one can do anything better than him? He himself has to look for and serve customers and customers, negotiate with suppliers, accept goods, deal with accounting, documents and other routine. The workers are all, as if by choice, slow, irresponsible and stupid.
Perhaps this is the case, but after all, hiring unsuitable employees- this is the mistake of the businessman himself. Remember Steve Jobs: "We hire smart people to tell us what to do." It is impossible to build a business without a well-coordinated team of professionals, so finding and attracting such people is one of the main tasks of a novice entrepreneur.
Define areas of responsibility and assign them to employees. Part of the functions, for example, accounting, can be given to Where possible, introduce a flexible remuneration system - a small fixed salary and percentages for meeting indicators (sales, services, production volume). And moderate your perfectionism a bit - even if something is not done as perfectly as you think, but the business is developing, then everything is in order.
Mistake nine: unwillingness to enter into a business partnership
About 70% of LLCs in Russia are registered sole founder, i.e. the partner business model is not taking root well with us. Moreover, partnerships are avoided even where it would be justified. Why? First of all, start-up entrepreneurs are unwilling to share the expected profit, although at the start of a business this is tantamount to sharing the skin of an unkilled bear. Another good reason is possible disagreements in the joint management of the business and personal problems in communication. To a certain extent, it can be recognized that the specificity of the Russian mentality is to mix personal and business relationships, and this is not always beneficial. But after all, many successful projects, especially in the West, are developing precisely according to the partnership model.
Let's see what a good business partner can offer you:
- resources and investments;
- an experience entrepreneurial activity;
- business connections;
- skills you don't have, such as sales;
- unique business idea, invention, patent;
- emotional support.
Yes, it is possible that it is not so easy to choose your business partner, but to refuse profitable cooperation just because you are afraid possible problems, not properly. Of course, all the conditions of a joint business must be carefully discussed before the start of activities, be sure to fix them in writing. Also keep in mind that an equal partnership, when the shares in the company are distributed equally, can lead to a stalemate in case of disagreement. It is desirable that one of the partners be the main one and bear the main responsibility for business development.
Mistake #10: Giving up early
If you have read the inspiring success stories of famous entrepreneurs, you know that almost every one of them has had to go through a series of big and small failures. But only the one who gets up one time more than he falls wins. You don't have to look far for examples - the business portal you are on now also developed through crises. Learn firsthand - from team leader Alexander Raptovsky.
We would love to hear from you stories of overcoming difficulties and successes, and perhaps it will be you who will someday tell aspiring entrepreneurs about the mistakes to avoid when starting a business.
Ecology of life. I have been self-employed for 14 years and made a lot of stupid mistakes along the way. In addition, I have taught people the art of doing business and have seen many of them make the same mistakes. These tips are written to help small business owners and especially aspiring entrepreneurs.
I've been self-employed for 14 years and have made a lot of stupid mistakes along the way. In addition, I have taught people the art of doing business and have seen many of them make the same mistakes. These tips are written to help small business owners and especially aspiring entrepreneurs.
1. Selling to the wrong people
While selling is the lifeblood of any business, you shouldn't try to sell indiscriminately to everyone around you, including friends and family. Moreover, it is a waste of time trying to sell to people who are not at all interested in your offer.
Selling to the wrong people also includes trying to sell to everyone. Selling to some customers is much easier than selling to others. My wife is a small business consultant and she tells her students that there are easy clients and difficult ones. If your potential client worries about every penny spent, if he wants a website but doesn't know why he wants it or doesn't know the internet at all, chances are it won't be the easiest client in the long run. Feel free to say "no" to clients who cause more problems than benefits. Let them go to your competitors. You will save yourself a headache and free up time for fruitful work with the best clients.
Just because a person wants to do business with you doesn't mean you should accept their offer. In my first year of running my business, I said yes to more than 50% of the people who approached me with an offer of cooperation. I wasted a lot of time on projects that were doomed from the start. I agreed to discuss the proposals of complete strangers over dinner, who were simply interested to know "could we come up with something worthwhile together."
None of them ended up bringing me a dime. If you have a suspicion that the meeting does not make sense, most likely it will. Do not rush to cooperate with random people just for the sake of cooperation. Now I accept no more than one such offer out of 10. If the idea did not capture me from the first words, I usually refuse or simply ignore the offer. Most meetings do not justify the time spent on them. Learn to reject mediocre offers, and then you will have the strength to see and not miss out on delicious options.
2. Tendency to spend too much
Until you've built a solid incoming cash flow, don't spend your priceless start-up capital unless you absolutely have to. I started my game development business with about $20,000 of personal savings, which quickly ran out and I went into debt. Unfortunately, the original idea didn't work, and it took me five long years before the business started to turn a profit. Then I learned that every dollar invested in a business must be returned through sales.
In 2004, I started a personal development business with only nine (9) dollars invested, even though I had the opportunity to invest much more. I did without an attractive logo, without a chic design for my website, without business cards and stationery. My only expense was registering a domain name. I wasn't going to spend any more until the business started to pay off. All further investments were already from profit.
Your business must be profitable for you. Before you "invest" in it, make sure you clearly understand how to get this money back.
Of course, some businesses require huge amounts of money to start, but in this age of online commerce, you can easily get started. profitable business, investing in it only pocket change.
3. Tendency to spend too little
Being too stingy is also wrong. Don't let frugality get in the way of your efficiency. Hire highly qualified contractors whose efficiency is higher than your own. Buy decent equipment if your income depends on its quality. Of course, you should not overspend and buy fancy office furniture. Furniture should be comfortable and help you work productively. Do not use outdated computers with ancient programs if you can afford something more modern.
Only with time will you gain the wisdom to know exactly when to spend more and when to spend less. Feel free to seek advice from more experienced entrepreneurs. Often the error becomes apparent as you attempt to explain your expenses to someone. And of course, some expenses are simply necessary.
4. Impersonation
Many aspiring businessmen say "we" when referring to themselves. It's very common, although it doesn't make sense. There is nothing wrong with a one-person company these days. About my business of computer games, I always said “we”, but about the business of self-development, I say “I”. My wife's business, VegFamily Magazine, is "we" because her company is an employee and she presents herself as "me" in her consulting work.
If you are the only person working in your company, feel free to say “I”. Pretending it's "we" when it's really "I" is pretty stupid. It doesn't give you respect. Positioning yourself as "me" is even more profitable these days, because customers will know that you are the owner of the business and will personally fulfill all the promises made to them. Commitments made on behalf of the abstract "we" often sound less convincing.
If you are new to business, you should not hide it. Based on your skill level when calculating the price of your products and services. Some aspiring businessmen feel they should act like actors. They invent non-existent merit for themselves and their business. Any attempt to fool your customers will sooner or later turn against them. If your business cannot exist without lies, I would not advise you to start such a business at all. If you can't give people a valuable product or service at the right price, you shouldn't be in business. Instead, focus on developing your skills.
5. Reassessment of the significance of the signed contract
I stepped on this rake countless times. I had signed contracts with serious companies on my hands, but they turned into dust if the CEO, for some unknown reason, just changed his mind. Of course, I was right, and any court would be on my side. But is it worth switching from your business to litigation? I decided that by doing what I love, I will earn more.
A signed contract is just a piece of paper. Only the relationships behind these signatures are valued. If there is discord in the relationship, then no contracts will save you. The purpose of the agreement is to clearly define the roles and responsibilities of each partner. But it is the relationship that guarantees compliance with the contract, and not paper with a seal at all. When I realized this, I began to spend more time working through relationships and less concerned about what is written on paper. My transactions have become much smoother.
As soon as you have to turn to paper to settle a business process, your deal is already in danger. Businesses in creative, high-profit areas almost always deviate from the terms of the contract written on paper. One of my lawyers, who has done dozens of computer game development deals, said that in his entire practice, he has never seen work go exactly according to a contract. Some of them didn't even remotely resemble a signed contract. And most of these deals brought in big money. Business relationships are like personal relationships - they cannot be written down on paper.
Of course, written contracts are still important, especially when working with large corporations where staff turnover occurs. But nevertheless, they are inferior in importance to relationships. Just don't make the mistake of assuming that signing a contract is the basis of a deal. The conclusion of the contract is only a shadow of the entire work on the project. Building relationships is the foundation of a deal. If your relationship with the client is in order, you do not need to worry about what is written on paper.
Sadly, the business is full of scammers. Many of them hold positions of general and financial directors or company presidents. There are people who are not interested in anything but money, and for the sake of profit they will lie and cheat. Some of them have already been caught in unclean dealings and sent to jail. But still remains great amount dealers doing dishonest business.
For example, in the computer games industry, it is not uncommon for developers to be cheated, even by large publishers. They "feed" the developers with promises of an early review of the project, and other empty promises. In fact, they are deliberately delaying the release of the game in order to keep another competitor of their similar games out of the market. Their goal is to have a Christmas sale with fewer competitors. Or they are waiting for the developer to run out of money, and he will sell them his project for next to nothing. Sometimes it happens. Business, especially in the entertainment industry, is not for the timid.
6. Ignoring your intuition
Intuition in business plays no less a role than in other matters. You'd be amazed how many multi-million dollar deals were made or rejected based on one of the directors' "sixth sense". And although it is commonly believed that business obeys the laws of logic, in reality everything is completely different. If you, when making decisions, neglect your intuition and are guided only by logic, you will very soon get yourself serious problems.
People aren't very logical to begin with. Often we simply do not have enough source data to draw logical conclusions. In addition, the result of the transaction directly depends on people, and we do not have a system that allows us to more or less accurately predict the behavior of the participants in the transaction. The inability to predict how people will behave nullifies all our logic. And only intuition can fill this gap. Usually the result of a transaction depends on the actions of several key people and to assume that everything will go exactly according to your forecasts is the height of self-confidence. Not a single deal goes according to the prescribed scenario.
It can be hard to turn down a project with a tempting budget, but when my gut tells me “you'll regret it”, then in most cases, after a while, I see that I was right. Sometimes, refusing to cooperate with a person, relying on intuition, after many years I hear from colleagues that they collaborated with this person and were deceived by him.
Intuition is an essential part of the decision making process in business. Since business is based on relationships between people, it is very important to get the opinion of other people involved in the project. If several people are negative, it is better to refuse the transaction. If everyone speaks positively, then you can proceed with caution.
7. Excessive formalism
I will repeat again. Business is built on relationships. In some cases, a certain degree of formalism is appropriate, but in most cases it only gets in the way. Business relationships work best when there are good relationships between people behind them.
I believe that excessive formalism is not needed even when forming new business relationships. When I receive an email that begins with "Dear Mr. Pavlina..." followed by a long-winded explanation of the nature of the proposed collaboration, I usually throw it in the trash. Especially if a person, referring to himself, says "we". It's much better to start the letter with "Hi Steve!" and then briefly and specifically, without unnecessary formalities, ask me a question of interest. This saves time and opens the door to human relationships. Real people don't want to build relationships with soulless corporations. It is much more pleasant to interact with the same living people ... or, in extreme cases, animals. J
Treat your business relationship as a friendship (or friendship). Excessive formality creates walls, and they do not contribute to the improvement of any relationship. No one likes to communicate through the wall... except the Chinese, of course.
The formalities are boring and tiring. People want to enjoy their work. If someone communicates with me, like a computer, I respond without thinking by pressing the Delete key (delete). But if a person demonstrates that he is a living person, who also has a sense of humor, our cooperation is much more likely.
8. Relinquishing your individuality
In the early years of my gaming business, I took him too seriously, assuming that I should act like a "business man", whatever that meant. Being the head of the company is a very responsible job, and the employees counted on me. Hit or miss!
I started this business at the age of 20, and 20 year olds usually have their oddities. But I assumed that for the owner of the company, the presence of oddities is unacceptable. Therefore, most of my business letters and electronic messages in dryness of style they looked like licensing agreements from Microsoft. I acted not as a person, but as a "company president". I have learned to repress my identity and my individuality.
Many years passed before I realized the importance of my own personality. Now that I'm a blogger, my quirks and my personality, on the contrary, have become mine. strengths. My personal quirks have given this blog a whimsical, unique flavor. If I were too serious and wrote more formally, my blog would become boring and dull and would probably lose most of its readers.
It's perfectly okay to have your own quirks and carry them over to your business, especially if you're young and playful. Don't be afraid to be more like Steve Jobs...and less like Steve Ballmer. Don't pretend to be someone you are not. Ultimately, you will enjoy your work much more if you attract clients and partners who accept you for who you really are. Feel free to refer people who want to work with robots to your overly serious competitors. They appreciate each other. J
If people do not understand your oddities, so much the worse for them. Focus your energy on people who are close to you in spirit.
9. Loss of focus on value creation
It is very easy to fall into the trap of feeling that the purpose of a business is to make money. The real purpose of business is to create value. While it is possible to make money in the beginning without focusing on value creation, it is not possible in the long run. Even the criminal business creates some value for someone. When you know that your business is only sucking money from consumers without giving anything worthwhile in return, it will undermine your self-esteem, and the business will not be able to grow.
What is your business for? It exists to provide value to you and your customers. The more you understand the value of your work, the better you can focus on it. The core value of my gaming business was producing quality brain entertainment. The main value of the StevePavlina.com project lies in the ideas of personal growth. But often business owners do not understand the value that their business will provide. They just resell things and hope for the best. It's a lousy business model. The world does not need an increase in the number of sales or goods. The world is interested in receiving true benefit, and it is to provide it that you should direct your efforts.
There are now more than 400 articles on this site in the public domain. These are quite valuable materials. Thousands of people visit this blog daily to get this value. Helping people grow is the main purpose of my business.
10. Lack of focus on business development
Although value creation is the main condition successful business, it would be naive to assume that you can focus all your efforts on creating value and the rest will take care of itself. You can end up with a business that creates value but doesn't make money. As a business owner, you must find the maximum effective method communicate your value to consumers. Most likely, your first attempts will not be optimal. You will waste a lot of time and effort trying to create and promote value. Don't be upset - this is normal. Most companies go through this. The main thing is not to stop and move forward.
Once you have a working business process, break it down into its component parts and try to optimize each one. Constantly look for ways to improve efficiency. Can the same be done in less time? And at a lower cost? Can you do this operation less often? Or entrust it to someone? How about delegating the entire process?
At the very beginning of my gaming business, I processed all orders manually. My business started in 1994. At that time, I received an order by email or through the site and used some software to send the order back by email. At the end of each month, I manually counted the number of sales. This method worked well when orders were low, but became cumbersome when sales increased. A few years ago I modernized this process.
Now online orders processed in automatic mode, including instant dispatch of the order, immediately after payment by the client. All orders are registered in the database, and I can see in real time how the sales of each product are going. It took some effort to set up this system, but it was worth it. This optimization alone allowed me to free up a lot of time and effort. In addition, I do not have to pay for the work of workers hired to process orders.
Do not use outdated methods for routine tasks that have long been possible to automate. Warehouse management, invoicing, bookkeeping, ordering, and more are easy to automate. If you're doing the same repetitive operations month after month, it's time to explore how to optimize them. Otherwise, you will be wasting your resources. And it's usually easier to save time and money than it is to start from scratch.
Internet business has huge opportunities for optimization. Constantly try new ways and measure the results. In the first year of launching this site, I experimented a bit with Google Adsense. A lot of people don't like the current placement of ad units, but this is the most effective placement. I posted them there because they work. Another optimization was the addition of a donation page. Some people click on ads, some donate, and some do both. Although value creation is the main goal of my business, it is also a commercial project that must generate income. I won't be able to write if I'm hungry. The more money there is, the more time I can devote to new articles. Therefore, value creation and optimization go hand in hand.
Building a successful business requires a lot of effort, but at the same time it provides invaluable experience. I know many people who left their jobs and started own business. Not everyone succeeded in what they planned, but I don’t know anyone who would regret this step. If you take control of your destiny in your own hands, you need your own business. published
Individual entrepreneurship is an area in which the threat lurks to a greater extent not in external factors, but in the entrepreneur himself, his mistakes. Novice businessmen often step on a rake that has already hit many others before them. Let's try to highlight the 10 most common mistakes that can be dangerous or even fatal for small businesses.
And a little thing can make a big difference
Everyone makes mistakes. But in business, even small and apparently insignificant deviations can have serious consequences. Of course, it’s impossible to do business without mistakes, but it’s important to try to avoid the most common ones that many novice businessmen have. Do not act recklessly, they say, you will not insure yourself from everything. Indeed, the same wrong actions for one business will create a real threat, while in another they will go unnoticed. But if the entrepreneur does not strive to minimize his mistakes, they will grow like a snowball. negligence in business relations unforgivable.
Everyone will have to learn from their mistakes, but in the beginning you can learn from others. To do this, it is worth studying the experience of predecessors and not repeating their failures. Anyone can make mistakes, the smart one will draw conclusions from them.
Rating of the most common mistakes of a novice entrepreneur
10th place
If a friend was suddenly
Partnerships are often a stumbling block for a novice businessman.
Start a business alone? It is difficult - as a rule, there are few funds, and the experience of like-minded friends is useful: who will support you in difficult times, keep you from a hasty decision, stand shoulder to shoulder? And then, will future contractors think that a lone founder suffers from a lack of trust, since no one supports him in his activities? In a word, this path is possible only for very narrowly focused market niches. Any development and advancement will require the sharing of powers. Sometimes the way out is in the family business.
Do business equally? It would seem that 50% shares are a fair decision, but this is only at first glance. Partners with equal rights will not always be able to agree on any sensitive issues, but they will arise sooner or later. It is important that someone has legal law final vote, otherwise conflicts are inevitable, and even, perhaps, a division of the business. And this is the end of the joint activity.
The way out is in such a distribution of shares that one participant has a “controlling stake” of at least 51%, which will provide the required point in controversial issues.
9th place
Do not treat formalities formally
Every business starts with papers. First, the activity must be registered, and already at this stage, many annoying mistakes are often made that can greatly harm the business:
- constituent documentation "from the Internet", and not drawn up for a specific case with prescribed important nuances and controversial points;
- inconsistency of OKVED codes with real activities; everything you do must be noted in the Unified State Register of Legal Entities, and new activity- enter into in due course, otherwise the counterparty may consider you unreliable;
- work without a license in the type of activity where it is required in accordance with Art. 12 of the Federal Law No. 99 of May 04, 2011, is unacceptable, this must be carefully monitored, especially changing the profile of work somewhat - it just might fall into the licensed area;
- careless storage of documents: the lack of the necessary paper in a controversial situation can be fatal.
8th place
Ignorance of the law is no excuse
Most importantly, the Labor Code must be respected. Unformed or incorrectly formalized employees, personnel inconsistencies, norms for wages, the regime of work and rest, and other points that a labor inspector can catch are fraught with serious troubles: fines, suspension of activities, additional checks.
Many entrepreneurs “stumble” over advertising laws: sending advertising messages, incorrect comparisons with competitors, logos and trademarks, similar to existing ones, signs - all this requires legislative compliance, which will have to be studied or consulted with specialists.
7th place
Don't know right? You're wrong!
In any business, inspections and unwanted contacts are inevitable. A businessman who does not know his rights is practically doomed. All types of inspections should not go beyond the legislative framework, but often frightened and inexperienced entrepreneurs themselves provoke inspectors to violate their authority or allow them to do so. What premises and documentation can be shown, and which ones are optional? What information to give, and what you and your employees are not allowed to ask about? What are the inspectors authorized to do, and what is beyond their authority? The entrepreneur must know all this himself and instruct subordinates.
6th place
"Who do I work for? And for yourself!”
An entrepreneur cannot simply “do business” without caring about the target audience and representing it poorly. Even if he produces a quality product or performs a service, it means nothing if there is no one to buy it. You should study the target audience even before you think about starting your own business: these are the basics of marketing, without which the business is dead. Focus on the needs of this category of people by promoting your products.
An even more dangerous mistake is not enough to study the market in which you have to act: the ratio of supply and demand, prices for similar products, the presence of competitors, etc. These data are key in the organization of any business.
5th place
Do you have a plan?
Meaning not necessarily real business plan required for lending or investing, but at least a rough vision of the near future. What will you start with? What points should be taken into account? How much should be invested in it? How long will it take for a business to become self-sustaining? This is just an incomplete list of questions that must be answered before starting a business. Actions "at random" in business can be very costly.
4th place
Don't be overly trusting
You are an honest entrepreneur, but not all of your future partners have similar moral principles. Sometimes the goal of partners and organizations is deception, profit, sometimes you can be set up or let down, not even always on purpose. In business, you have to figure out who you're dealing with. It is better to check the possible unreliability of partners before concluding contracts with them, and not suddenly find out later along with unpleasant surprises in the form of disrupted deliveries, services not rendered, poor quality products, and also the refusal of the tax authorities to deduct VAT. There are plenty of services and other opportunities for due diligence today.
3rd place
Incorrect choice
This is the first danger that awaits a person who decides to start his own business. “What should I do?” he asks himself. Which activity he chooses will determine his future strategy. To reduce the risks of choice, an initial study of the market and the target audience is necessary (see paragraph 6).
It is also important to remember about competitors. Your product should be relevant to customers, but also unique in some way. Don't let competition scare you: it is an incentive for development and insurance against dishonesty. If you choose a narrow sphere with no competitors at all, it means that few people simply need it.
Having chosen the type of activity, correctly enter its OKVED code when registering a business.
2nd place
Money, it's all about money!
There is never much money. But are they enough to start and run a business? If a future businessman does not know how and does not learn to count and distribute funds, he will not see profit.
Some people think that even a small business needs a lot of initial capital to start. But for many types of work, it is not necessary to rent an office, purchase equipment or spend money on beautiful sign and business cards. You can often get by with the bare minimum, gradually improving resources as profits come in. In a word, we need a primary plan (see paragraph 5).
Others, having received the first money, rejoice and strive to spend it on themselves, and not on business, taking it out of the business ahead of time, which does not have a financial “airbag” for unforeseen expenses. And they usually end up right here.
Finally, with all due respect to money, you can not do business solely for the sake of it. The main goal, however, is to bring people a certain benefit in the form of a quality service or a product they need, for which they are ready to pay, otherwise it will turn out to be what is called the ugly word “pushing in”: such a business will not last long.
1 place
Rely on others, but don't make a mistake yourself
When creating his own business, a person expects that it will work for him, and strives to delegate as many powers as possible to third-party performers, sometimes not delving into the essence and content too much, demanding only results. Small business, especially at first, cannot work "on the machine", without the strong and active participation of its creator, no matter what the advertising of consulting services promises. At first, the business will require dedication, investment not only of funds, but also of its personal component. Otherwise, it will work for the one to whom you delegate this duty. Any brainchild in its youth needs a selfless parent.
But the second extreme is also dangerous - “Only I know how to do it!” In business, there are specific industries that require education and relevant experience, for example, legal support, accounting. You can’t do something that you don’t know how to do qualitatively, just by reading the instructions on the Web. In the same way, it is impossible to control everything and everyone.
SO! In 1st place in importance is an error that can be formulated as an incorrect distribution of responsibilities and priorities.
The most important thing is that if you make a mistake, do not give up, strive to correct it and not repeat it. The secret of the survival of any business is the persistence of the entrepreneur: even if burned, he goes forward, gains experience and skills, and ultimately achieves success.
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Talking about what a novice entrepreneur should do is not entirely correct. There is neither a general law of success for, nor separate recipes for each of its possible areas, which would always work flawlessly. But the experience accumulated over the years and empirical material allow us to talk about what definitely cannot be done by those who decide to open their own business. Of course, you can acquire wisdom by stepping on all the rakes yourself, but it’s better to use O. von Bismarck’s formula: “Only fools learn from their own experience. I prefer to learn from the experience of others."
Underestimating the experience of others
Often how it turns out: a person reads the biographies of great businessmen (J. Rockefeller, H. Ford, S. Jobs) and is inspired by their successes. It is interesting to read about takeoffs, moreover, they are. The reverse side - overcoming failures, mistakes made play the role of episodes and often go unnoticed. We forget how things really are - that success is months, or even years of preparation behind a screen, and only an hour in the spotlight. Based on this, it is worth remembering that it is always necessary to analyze someone else's experience in two planes - “worked” and “failed”. The second is often even more useful, although much less is written about it.
Hope to sell an idea
Investors very rarely invest in ideas. Investing is as much a business as what you do. Would you yourself invest in a product that does not yet exist? Therefore, when trying to find funding, you should at least have several hundred pre-orders for it. And even better - a working model has already been sold to a certain number of people. It is clear that this is just an example, the essence of which boils down to the fact that it is very difficult to sell something that does not exist. To do this, you must have at least strong evidence that the idea is needed at all.
Trying to make everything perfect
In other words, the notorious perfectionism. Briefly this mistake is described by the well-known saying: "The best is the enemy of the good." Many startups are stuck in their first project because they have been trying to “smooth corners” for too long. As a result, it either failed, because it was impossible, and they lost a lot of time, or competitors from among other enthusiasts did, albeit worse, but faster. And remember only the one who was the first. In our time, this statement is especially true. Therefore, it is very important to understand that it is impossible to make an ideal product in all respects. As good as the iPad is, it doesn't change the fact that millions of people prefer tablets from Samsung and many other manufacturers.
Start a business to make money
In any case, this will be your goal, otherwise opening your own business loses all meaning. But here we are talking about creating a business not with the sole purpose of making a profit, but also with the goal of solving a problem. In other words, as experts note, it is very difficult to build a long-term strong business on trying to make money “on the wave”, on trendy items and phenomena. More successful are those companies that are not driven by the search for a niche where you can quickly earn money, but think of the product as a tool, passion, hobby. Often it is they who create something that turns the view of the world.
Create the product or service you want
Today it is no secret to anyone that the market lives according to its own objective principles and laws. Therefore, taking on the implementation of your idea, think about how the buyer will react to it. Will he be interested in your offer? Are you doing exactly what the market needs? Otherwise, doing what you want and what only you like, you run the risk of "burning out." Even the giants of the industry spend millions annually on marketing research. It is clear that at the stage of creating a business you will not have such money at your disposal, but you will certainly have the opportunity to use the Internet. This is already enough to determine, with a skillful approach, how potential buyers relate to your product or service.
All focus on money
"Where to get money?" is a global issue that worries all start-up entrepreneurs. Spending points can be different: hiring specialists, renting production space, purchasing, logistics, and much more. This is all very important. But focusing on money alone is wrong. In business, the ability to find and use other resources is not the least important. When renowned entrepreneur MJ Gottlieb became a licensed partner of Samsung America, he didn't get a dime from the Korean company. But at his disposal were production facilities, the best accountants, a distribution network and everything else belonging to the technology giant.
Personnel policy and cooperation
Find good specialists into a project that is at the beginning of its journey is not an easy task. Not everyone will share your ideals and approach work with the same enthusiasm as you. You should be prepared for this. But in no case should you approach this issue without the due degree of attention. Check the people with whom you have to work. Choose partners, suppliers, not only based on the price of their services. One more thing. It is very common for us to recruit relatives and friends into the business. This is bad practice. D. Ogilvy wrote that only by stepping on the rake several times on his own, he was convinced that it was impossible to hire his relatives or relatives of clients to work. First, it is harder to fire them if they fail to do their job. Secondly, even if they are better than everyone else, you will not get rid of the talk about what exactly their bosses are promoting in career ladder and forgives everything. In such conditions, it is difficult to create. Thirdly, by firing such an employee, you will jeopardize the relationship with him or the client.
Underestimation of competition
Young projects often tend to describe their idea as one that has no analogues, and, therefore, has no competitors. This is mistake. Something truly unique is created very rarely. Even if the market today has nothing in common with what you plan to produce, it is not a fact that it will not appear tomorrow. Market analysis will also help in this regard if someone has already tried to implement a similar idea before, but failed for various reasons. In other words, you should ask yourself the question not only about how strong the competitors are, but also to figure out what is the reason, if there are practically none.
Lack of focus
It often happens that in search of their place in the market, a young entrepreneur grabs several ideas at once and works on their development in parallel. Dmitry Alimov, Russian entrepreneur and managing partner of Frontier Ventures, says this approach is unacceptable. “In the eyes of an investor, the lack of focus suggests that the team doesn't really believe in any of these projects. People waste their time and effort by chasing a few rabbits, which significantly reduces the chances of success, as focused teams tend to win. As someone who has built several businesses myself as an entrepreneur, I am sure that a truly serious opportunity cannot be tackled half-heartedly.
Sacrificing a customer for profit
Reaching a certain level development, the question arises of further expansion of the business. The main thing here is to avoid a number of mistakes. A radical change in the positioning of a product or an improvement in service, associated with a sharp increase in prices, can turn your loyal audience away from you. Similar mistakes were made even famous companies. For example, "Oldsmobile", a manufacturer of cars that were positioned as cars for middle-aged and elderly people. In the wake of interest in retro, this division of GM produced an advertisement for young people that was supposed to present their cars as "cool". Failed - advertising remained misunderstood by young people. Even worse, some of the previous customers left, which caused sales among the target audience to fall.
Bymaterials
- Incorrect definition of activities in the charter
LLC and JSC ( joint-stock company) in their charter sometimes incorrectly define the types of activities. The firm sold stationery, and then began to provide legal services.
Violation is punishable under Art. 14.25 of the Code of Administrative Offenses of the Russian Federation “Violation of the legislation on state registration legal entities and individual entrepreneurs. The prosecutor's office will turn a blind eye for the first time, but for a repeated offense they can be disqualified for a period of one to three years.
Children's institutions (camps, clubs, etc.) are strictly checked. If your organization is engaged in educational or medical activities without a license, there will be serious problems.
- No license
Sometimes entrepreneurs shift the profile of unlicensed activities and work in the direction of an adjacent, but licensed one. For advocacy, it is enough to obtain the appropriate status, and for a detective, a license is needed.
Educational activities in the play center or children's section are educational, licensed activities. Some IT services are licensed. So, Cisco received a license from the FSB for encryption. Computer equipment that cannot be operated without a license is determined by the Decree of the Government of the Russian Federation No. 313 of 04/16/2012.
Article 12 federal law About Licensing certain types activities” there is a corresponding list: production medicines, aviation equipment, weapons, fire safety, communication services, educational and much more - more than 50 positions in total.
The activity specified in the list without a license and causing damage to third parties threatens with a fine of up to 300 thousand rubles or arrest for up to six months (Article 171 of the Criminal Code of the Russian Federation).
Illustration: istockphoto.com
- Confidence in your own legal competence
Small businesses often save on legal services. Experienced entrepreneurs believe that they do not need help and conclude contracts themselves. The result is litigation costs.
Aspiring entrepreneurs handle marketing, advertising, bookkeeping, and legal paperwork themselves to control all business processes. Solving all issues alone is difficult. AT good companies all processes take place with the participation, and sometimes under the guidance of a lawyer. - Inattention to reporting when participating in tenders
According to many, public procurement tenders are a direct way to enrichment. But the companies whose goods and services they buy budget organizations are subject to counter tax audits. Your accounting and legal documentation must be in perfect condition, all taxes and fees have been paid, and debts to the budget have been closed. Otherwise, problems cannot be avoided.
- Non-Compliance with Advertising Laws
In advertising, the use of images of children is limited. If you manufacture goods and provide services to minors, you must comply with the law "On the protection of children from information that is harmful to their health and development."
Any word in an advertisement must be documented, and in the first place - "the most", "best", "No. 1", "leader", "absolute", "only" and the like. In order to avoid FAS claims, many companies add: “probably”, “possibly”. “Probably the best coffee in the world,” is how they write.
- Violation of labor law
Companies violate the regime of work and rest, wage rates, conclusions, changes and termination employment contract, including upon dismissal, do not comply with the law when hiring foreign workers. Violation Labor Code entails not only large fines (for improper storage work books- a fine of 50 thousand rubles), but also criminal liability.
With individuals who are not individual entrepreneurs, instead of labor, they often conclude civil contract, exempting the employer from contributions to the fund social insurance. Payment for work under such an agreement is made upon completion, the main and study leave, sick leave, night and overtime work etc. The fine for such a violation can reach up to 100 thousand rubles - if the labor relations are proven in court.
- Working with an unverified partner
Products or services can be sold on credit (sometimes without a contract). It is also necessary at the preparatory stage: check the extract from the Unified State Register of Legal Entities / EGRIP on the website of the Federal Tax Service. The partner may change management or liquidate the firm, which is not reflected in the register. Therefore, you need to find out from the filing cabinet of arbitration cases, whether the partner is going bankrupt, and check the status of the company on the website of the Federal Bailiff Service.
The FAS also maintains a "black list" of unscrupulous service providers. Perhaps in public procurement your partner has shown himself with negative side. Zero should alert you tax reporting companies. In the contract with the partner, provide for interim measures: forfeit, surety, pledge, retention of the debtor's property. Then the probability of sueing at least part of the debt increases.
- Solving problems through "trusted" people
Many entrepreneurs turn to lawyers and go to court when they have been robbed by "tested" people. "To negotiate" is illegal, short-lived and dangerous. The well-being of business is built not on bribes, bribery and false documents, but on the law.
- Ignorance of their rights and freedoms
If inspection bodies, police, investigators came to your office - no checks without relevant documents. Seizure of your documentation is possible, on the basis of a decision of the investigator, interrogating officer or with the approval of the court.
According to Art. 51 of the Constitution of the Russian Federation, no one is obliged to testify against himself. According to Art. 48 of the Constitution, everyone is guaranteed the right to receive a qualified legal assistance. Remember: silence is not only golden, but also your freedom.
Inconsistency of the organizational and legal form with the goals and objectives
Many start-up entrepreneurs (society with limited liability): this is allegedly more solid than an individual entrepreneur (individual entrepreneur). If you are a designer, a private developer, a photographer, or your small business is creative, IP status is optimal. To work in a team, and unite on the basis of a contract.
Today, large and serious organizations are actively resorting to outsourcing. No one will be embarrassed by the contract with the IP. Many companies take copywriters and photographers out of staff and conclude contracts with them as individual entrepreneurs. But last month, the Supreme Court of the Russian Federation issued a ruling, recognizing cooperation with individual entrepreneurs as a tax evasion scheme.
IP registration is not required founding documents, seal and authorized capital. But individual entrepreneurs are prohibited from certain types of licensed activities (for example, retail strong alcohol), and for obligations they are liable with all their property. If you want to open branches, subsidiaries or plan to merge with other companies, then register an LLC.
Study the issue in detail and choose the optimal reporting and taxation system in order to avoid problems in the future.
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