There are many myths about business and these have adversely affected the success of many existing entrepreneurs and they prevent potential entrepreneurs from going into business. This area will be continually update with such myths and will give our view of them.
1 There is no need for a business plan, i have a clear vision in my head of the business and its requirements– There is the need for a business plan to clarify the purpose and direction of the business, to attract funding, and to ensure the business is on course with meeting goals, etc. milestone once it is operational.
2 I can get 100% financing to start up my business once I have a good business idea. Financial institutions require that you have a stake in the business. Most require you have as much as 25% of the sum required to start up the business. Some may consider as part of your contribution business assets that you own. If you want to start a business, however, it is a good idea to start saving towards it. You also need to think of collateral for the loan and your financial projections should reflect your ability to meet loan repayments.
3 The customer is always right – you need the customer and his/her input but understand that you cannot satisfy all the customer needs and you do have to be guided by the particulars of your company, its policies and resources. Listen to their views and empathize but always set the expectations as to what you can deliver and under what circumstances. Such open disclosure may save the relationship.
4 Once you establish the business the customers will come. Please note that customers will not necessary buy the best product, in the best location at the best price. Customer behaviour has to be studied and can vary depending on many factors such as culture, race, etc. You have to have a product that meets the needs of your target market. Test the business model. You should concentrate on its marketing and establishing a proper distribution system. Study your competition and know that they will not stand idly by while you capture their market. Marketing should be part of your everyday activities as you seek to position your product/service. put systems in place to win and retain customers.
5 Consensus building is the important factor for effective team work. This has to be analyzed against a backdrop of the need for the evolution of good ideas that often do not agree with what the other members of the team wants. Try instead for effective collaboration that can be forged once persons are aware of your vision and encouraged to work with you to realize.
6 You can outsource the financial aspects of your business. This is risky as on a day to day basis you need to be able to trap your financial and other performance. You need to know what is happening from with your business finances on a day to day basis especially. As a small business owner you therefore need to become aware of and utilize software that can help you to perform this activity. You can outsourse the preparation of final accounts for the business.
7.Low prices will help you to win customers as that is what they are looking for. This is an error and cannot be used to build a strong business as customers also care about value and the satisfaction of their need. The low priced product/service has to deliver value in keeping with the price. Often also to make low price a viable proposition, you may have to do volume sales and not all small businesses can do this.
8 Utilize all social media. You should determine where your niche market hangs out and hang out there. Concentrate your efforts on aspects of the social media that is frequented by your customers.
9 Revenue is the important figure to monitor. Companies can be making vast sums in revenue and still be in trouble financially. I tell most persons seeking to go into business to purchase a monopoly game and start playing it. There are valuable lesssons to learn about the need to properly balance purchase of assets and maintaining a healthy cash flow. Most of the big companies in Trinidad and Tobago went under because of cash flow problems. Never assess a company without seeing their cash flow position. Today assessment of companies is often based on a balanced score card where a series of variables are taken into account.
10 Its good to be all things to all persons. This will invariably lead to failure. Focus your activities where you have the competitive advantage where they can do the most good for your business.