Friday 18 March 2016
Lots of people, for whatever reason, find themselves in the position of starting up their own
business. This may be through being made redundant, or through joining the workforce for
the first time, or for other reasons.
Here are some common pitfalls that, if avoided in the start-up phase, should help you on the
road to success.
No Business Plan: This is simply silly! Would you run the marathon without a training plan?
Then why would you expect to be able to run a business without first mapping out your steps
to building your profits. Another upside of creating a business plan is that it will focus you on
the issues you need to address, and help you to ascertain the level of funding you may
Raising too little capital: Many start-up companies assume that all they need is enough to
rent a space, buy a computer or other equipment or stock, pay for a bit of advertising and
everything will fall into place. Not so! You need to consider all the overheads, such as light
and heat, insurance, the costs of financing such as overdraft or term loans, and a salary for
yourself until such time as the company is up and running and making enough profits to
cover all this itself.
Raising too much capital: Not quite so common as the previous one, but it happens all the
same. The danger is that the money is quickly spent on too many salaries, and general
wastage such as over marketing, while the core product has not been developed enough to
Targeting too small a market: We are often told that if we can find a niche product or
service, we will corner the pot of gold because nobody has yet thought of it. But stop to think
for a minute – maybe somebody has already thought of it, but has decided that the market in
which it is saleable is too small to make the project viable. For example, if you create or
develop a niche product, that can only be used by companies with over 2,000 employees and
only in Ireland, or only by families with six children or more, you will soon find that your
market has dried up pretty quickly as you are limiting yourself to a small group of potential
clients. So always think the product or service right through to the end market.
Asking too many people for advice: It is always good to seek people’s opinion, but too
much advice can be confusing and debilitating, so choose who you listen to wisely. It’s
always a good idea to pick out a couple of key advisors, you may need to pay them, but it can
be money very well spent if it guides your company into profitability faster.
The above list is not exhaustive, but if used, should certainly give you a better chance of
thriving and surviving in the longer term.
Quinlan & Co,. Frederick House, New Row, Naas, Co. Kildare