The Most Common Start-Up Mistakes

Recently a social networking site colleague posted the following question and I responded.

What is the biggest mistake entrepreneurs make and how would you suggest they prevent that mistake?

I can think of quite a few!
>> Not preparing a business plan Solution: Take time to research & write
>> Not discovering/creating a competitive advantage Solution: do a thorough SWOT, and have a sound advantage before launching
>> Not understanding that business ownership means being a really good sales person Solution: ensure compatible personality traits, sales experience & training
>> Undercapitalizing Solution: assuming getting a larger loan is not possible, start smaller plus beg, borrow and barter what is needed to launch
>> Overestimating first year revenues Solution: more conservative estimates; realistic, optimistic and pessimistic pro forma income statements
>> Underestimating the time it takes to land those first few clients solution: more realistic understanding of the sales process/cycle and lead to land ratio
>> Not investing in marketing/advertising Solution: robust marketing budget and professional assistance with branding

I can give you more, but these are the ones that came right off the top of my head.

Strategic Alliances Create Early Growth

A “strategic alliance” is an agreement between two or more companies to conduct a certain aspect of business in a mutually beneficial way. Successful strategic alliances can help small businesses to increase the size of their product/service offering, extend their market reach, improve productivity or create that crucial competitive advantage. Ultimately, this means opportunity for faster-paced launch and earlier growth, without a burden of added capital or operating costs.

Like any business model, a strategic alliance needs research and careful planning. A successful alliance needs to fit your own business profile. Here are some key considerations:

· Create a list of desired partner attributes
· Source out potential partners with a compatible vision and similar goals
· Choose a partner who is focused and well-established
· Choose a partner with a compatible brand/reputation
· If competing in the same market, consider the affect on your market position
· Consider future directions and whether they merge or diverge
· Determine the timing – one time project or long-term relationship?
· Create a contract, including precise expectations you have established together
and clear terms of payment
· Create a systematic communication method
· Create a clear exit strategy
· Put everything in writing

Finally, not only will you need to seek out a desirable partner, but you need to be a desirable partner to someone else. This has to be “win-win”, not “how can you help me?” Your own business will need to be in tip top shape with an up-to-date business plan, established procedures, a good track record with clients, professional branding and reputation, and a robust marketing strategy. If these foundations are in place, you may find other companies are seeking you out as a strategic partner. The Brampton Enterprise Centre has a plethora of resources to support you as you prepare to develop a strategic alliance. Call us at 905-874-2650 or visit www.brampton-business.com