Always aim high. One of the biggest pitfalls of a new business is not thinking big enough. You may only want to make a comfortable living for you and your family, but the pitfall here is being content with just sustaining a nice lifestyle. With no ambition to expand your company, you may be one of the first to fold in a tight situation. So, by all means, be greedy and expand; it’s capitalism at its best.
It’s also the best way for you to protect yourself from a bad economy. Even if the risks are high, it’s better to take that risk to get a foothold in different areas which may have better business during different times of the year, or may fair better during lean times. But proper risk assessment should still be employed. There’s a difference in going for the gusto and going for broke.
Always be careful when choosing a business partner. Remember, even though it probably makes sense financially, most partnerships don’t work out. If money’s the problem, try to borrow as much as you need to start and grow your business. But if you absolutely must take on a partner, make sure it’s someone you can really trust. Untrusting relationships end in bitter divorce — just ask the 50-million separated couples.
Don’t spend all your time doing the actual work, that’s what employees are for. If you have little or no business experience, you especially need to spend your time becoming more acquainted with the “business side.” You may save money doing the work yourself, but you will end up losing out by not keeping up on the business end, and losing valuable time.
Don’t drop your prices so low that you can’t turn a profit. Even if you have a line of customers out the door and around the corner, you can’t turn enough of a profit if your prices are too low.
Don’t worry too much about your competitor’s prices; instead, work more on advertising, marketing, and customer service. Being treated with kindness and respect is more important to most consumers than the same product for a few pennies less than the other guys.
Although employees are one of the most important factors in the success of your business, don’t blindly hire people because you really need someone. You should always have a minimum of three interviews for one job opening. This ensures that you have a wide selection of candidates to choose from. Also, don’t hire someone with no experience just because they are cheap. Only hire inexperienced employees if you or another employee is in a position to train them.