The fact is, you’re not the first person to have thought of starting a small business. Usually, you aren’t even the first person to have a particular idea for the type of business you’re starting. But this is a good thing, because you can browse around and learn from the experience of others, saving you some stumbles and mistakes.
Owning your own business is a great feeling, as long as it is successful. You get to call the shots and be in charge. Many people who start out their own business have had experience working for other employers. If so, you know the feeling of frustration you have had from watching management and owners make bad decisions. You may have even been laid off from a company that went under – possibly even you watched in amazement as what could have been a flourishing business went under through bad management.
The Buddhists have a saying: The thorn in your path and the beautiful sunrise both have something to teach you, so you should show gratitude for both. To interpret from the poetic imagery, the misadventures that you’ve had teach you through experience how to avoid them in the future.
What kind of mistakes do businesses make? Some are too ambitious; they take off in a flurry of optimism, gathering up investor capitol and splurging it like there’s no tomorrow, thinking that it is inevitable that they’ll get that money back later. You see this especially with web start-ups; the initial “web bubble” was produced by entrepreneurs and investors flocking to the growing Internet market with lofty ambitions, only to discover that there wasn’t nearly as much gold in those hills as they previously thought. You see less of that today, but a small “web 2.0 bubble” has surfaced, again with people mistaking buzzwords for business logic.
Businesses also make a mistake by not focusing on the customer. The computer retail store CompUSA has recently announced that they’re going under for good. To read through former customer’s comments on the social news sites, it seems like the closure couldn’t come soon enough. There are horror stories of bad service, sloppy inventory stocking, predatory business practices such as charging a 15% restocking fee even when refunding for a defective product, and general incompetence.
Not knowing the customer very well is another common mistake. You might ambitiously take off on a tangent and start marketing this new, innovative product, only to discover that it’s “new and innovative” not because nobody ever thought of it before, but because nobody ever wanted it. This is a little harder to predict: remember pogs? Little cardboard circles with designs on them, which were gaming pieces you could play like marbles – they suddenly became a fad collectors’ item many years back. Who could have predicted that? Or Beanie Babies – simple, small stuffed toys. Suddenly there was a huge demand for them. Today you can hardly give them away. Why? It’s hard to predict what people will want, but if you listen to them and watch your sales figures, you’ll at least avoid the mistake of being stuck selling a product with no demand.
The truth is, running a business is fraught with stumbling points and potential areas for gross errors. Do all the learning from other people’s mistakes that you can, because you’ll certainly have plenty of opportunity to make your own, too!