Get Smart Before starting a new business - Part 01

Having been a business consultant for over 20 years I have seen (what seems) every business idea, an under-funded start-up (including some of mine) in the sun. And probably 80 percent of them failed. In essence, the reasons are always the same ... an overestimation of the market and sales and underestimate costs. The other main reason for failure is that people simply have no business knowledge to make good decisions. Passing an excessive amount of time reinventing wheels up by the rays, most of it on the basis of conjecture and wishful thinking. They simply do not have an adequate foundation of knowledge to handle the workload required to commence business and have crumbled under the blows of information requirements to effectively run the business startup, management, marketing, sales, implementation of technology, accounting, legal, human resources, taxes, etc. In short, this is too much for an inexperienced person to digest one hand while keeping all the plates spinning daily business operations with the other hand. People get so many plates spinning in the air at some point lose control. And the plates to fall to the ground one at a time ... until it fails completely.

I've seen people refuse life savings on a "guaranteed idea." A story I like to tell my clients is to launch a "wicker furniture" business that I knew in Toledo, Ohio (I was not engaged as a consultant). This particular individual spent money on a lease a year in a popular shopping strip, the renovated facility, the information technology implemented to manage point of sale process of automatically updating the accounting, inventory, new telephone systems, etc. He bought about $ 30,000.00 in wicker furniture, spent money on a marquee (another couple of thousand dollars), as well as furniture for the office of fantasy. It was the owner. The master to buy things. -One thing entrepreneurs tend to be good at it you know all the things they need to pay for the new company. Hanging from the "big" signs of having ... Well ... That's when the fun began ...

I told an associate of mine at the time that the company would fail within a year. I was wrong. It took 90 days. This guy did not have the traffic to his store. I'm not sure of the real numbers, but a hypothesis intelligent dropped in excess of $ 100,000.00 for the project. 90 days later, turn it off, because the furniture did not sell. The furniture was "okay", which was not the problem. He ran out of money to advertise in a significant way. He estimated sales based on walk in traffic I suppose. The story is a classic because it represents very well what happens to people all over the country every day. Savings blown futures wiped out, destroyed marriages, relationships (and ratings) destroyed. All because people "think" they had a "certain idea" ... a decision on wishful thinking, hope, fantasy and false illusion. Can you think of ways that $ 100,000.00 would be better spent? Perhaps he could have bought some books on business, went to school, maybe he visited the local library instead? This is a true story.

I was watching the news the other night, and Jim Baker, former Secretary of State under Ronald Reagan, he was promoting his new book ... and in the book he quotes his grandfather's favorite saying of the 5 Ps of success: Proper preparation prevents poor performance.

I thought of writing a series of articles about the importance of obtaining information business practices before starting a business, how to write a business plan, how to raise money for a business, how to get free publicity, etc. And hearing these 5 P got me thinking ... How many people considering going into business will actually take the time to learn, before you spend money on a stupid business investment? How many people are intelligent enough to understand that they do not understand? To find out what you do not know and be wise enough to know that there are some things that do not know do not know? (It was not a typo).

If you are an entrepreneur with limited experience, you should keep your eyes on my articles in the coming days. I'll share some of the things I've learned over the years and you may be able to collect some 'curiosities of the information that will help you avoid making mistakes ... possibly preventing some heartache few.

To your success!

James W. Hart, IV ...