Many outstanding business ideas are born from a spark of passion: that moment when a daydream stretches into the realm possibility.
But passion is also the root of failure if it means you get lost in the excitement and hope of building that dream without balancing it with reality, says inc.com. You’ll hear what you want to hear, believe what you want to believe, and neglect to do your homework before taking the plunge.
But it doesn’t have to be that way, you can have passion without being blinded by it. Be especially on guard from making these three mistakes:
Failure to do real market research.
Come on, admit it. Your neighbour, friend–or mom–told you that your idea is the best one this side of paradise, right? And why shouldn’t you believe them? Everyone you know has been full of praise and encouragement, so they must be right.
I’m going to be blunt. These folks have to tell you all of these good things. They love and care for you and want to support your dream. But they are not necessarily your ideal customer.
Create a plan and test your idea. A good market research plan indicates where and who your customers are. It will also tell you if, when, where, and how they are likely to purchase your goods or use your services. It doesn’t matter if you have a single product or a full line, don’t pour thousands into the branding, production, and packaging prior to rolling it out. First, take your product to mini-expos, school fundraising events, and even home parties. Do focus groups with people who fit your ideal customer profile. Make sure they are strangers, not friends and relatives. Create a dashboard that reveals your findings and adjust your product and marketing approach accordingly.
Underestimating costs.
I once coached, albeit briefly, an inventor who had a wonderful product ready to bring to market. Sadly, she invested her nest egg, mortgaged her house, and spent two years creating the prototype, branding, and packaging for a single product. Her product idea was a good one–she even had a pending purchase order from a major retailer. Her mistake? She assumed that a bank would loan her the money to manufacture this order. Here she was, no savings, a second mortgage, and in debt to friends and relatives and no bank would accept a purchase order as collateral for a loan.
Too many entrepreneurs believe that if they can get the interest of a major distributor or retailer it will be smooth sailing from there. Do you have any idea what it costs to manufacture, brand, and package a product? Do you know the minimums required by most factories? Do you know the cost of manufacturing in the UK versus overseas? Can you even grasp the reality of the landed cost of your product? Costs of customs duties, tariffs, taxes, insurance, currency conversion, crating costs, and handling fees associated with importing are enormous. These are the things you may run into if your product is promising. Do your homework before you take your first big steps and make sure you have enough money to take the plunge.
A lack of support.
So you’ve done your planning, estimated your costs, and gotten product sales rolling. Hurray! Now you have a business. But why? It’s that freedom thing again, isn’t it?
Every entrepreneur I’ve ever spoken to values freedom and that value is what drives them to become an entrepreneur. Yet, they work 60 to 80 hours a week. They worry about where the money to land the next order is coming from. They carry a burden of guilt for not spending enough time with their loved ones, and they don’t take care of themselves. What kind of freedom is that? Sure, these sacrifices may be the reality in the beginning, but to achieve true freedom things have to change as your company grows. You need help: employees, advisers, and a coach and mentor.
Can’t afford help? Think again. I promise that you are wasting a lot of money by trying to be an expert at all things, including the things you absolutely can’t stand doing. Stop the madness. Bringing a business expert onboard will make all the difference and potentially save you a fortune. Being an entrepreneur doesn’t mean that you have to do it all alone.
