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Starting a Business? Don't Do This. (Part 2)
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Starting a Business? Don't Do This. (Part 2)
Andrea Coombes
4. Not connecting with the customer. Small-business owners often focus on their new product or service, and sometimes they forget a necessary aspect – how to connect with their customers.
Mr. Spinelli says entrepreneurs often fail to answer basic questions, including “How am I going to get to the customer?” and “How is the customer going to get to me?” This includes things like getting customers into a store or to a Web site as well as physically getting a product to a customer.
Another mistake small businesses make is focusing on the broader market rather than core customers, says Jack Fuchs, as business consultant and lecturer in entrepreneurship at the University of California at Berkeley’s Haas School of Business. “Too few entrepreneurs go out and really talk to customers and do all the leg work necessary,” he says.
One idea: Ask potential customers to agree to a provisional purchase order for a pending product. “If you ask that question and nobody buys it,” Mr. Fuchs says, “maybe that’s a hint” that your business idea isn’t suitable for the market.
5. Failing to seek advisers. Would-be entrepreneurs mistakenly think people like Bill Gates became successful without aid from others, Mr. Schramm says. “Most entrepreneurs of large-scale businesses are actually [part of a] team of people,” he says.
Entrepreneurs need to find industry experts who are willing to advise them – even if it means cold-calling people you don’t know.
And you may need investors, but make sure the fit is right. “Just because they were the right investor for Google doesn’t necessarily mean they’re the right investor for this particular company,” Mr. Fuchs says. “Some people would like investors who are going to help a lot, some want investors who are going to help only on the largest strategic issues.”
6. Not reacting to market changes. Entrepreneurs need to be “very quick and nimble on their feet,” says Mr. Schramm, to stay on top of fluctuations in their industry.
Ask any successful entrepreneur, “and they will tell you that the company they ended up running was not very much like what they thought they would do,” he says. “They set out to sell X and the market doesn’t buy X, and they quickly move around and create X-plus-1 because that’s what the market wants.”
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