what is the worse mistake made opening a new business?

Answer 1

Not having enough capital (cash) to carry you for the first 6 months when you won't be making much money.

Answer 2

It looks as though many of the respondents haven't started very many businesses!

There is no single bad mistake. You can live with mistakes, as long as you compensate for them. But, there are 4 critical things ...

1. You MUST treat this as a business and not a part time hobby. If you don't commit full time, you won't succeed.
2. You MUST watch your cash. You need a 12 month (minimum) cash flow plan. I recommend a 2-year plan, even though some of it may be "fuzzy."
3. You need to know where customers are going to come from. You need a realistic marketing plan (not a "wish list") and an aggressive sales plan to execute the marketing plan.
4. Do NOT bring people into the business that can't help you. If you bring someone in, make sure you have specific plans on how to use them, and make sure they can execute. Don't bring in friends and relatives.

Good luck, and get some local advice from professionals.

Answer 3

All right and good answers (well mostly), but I think that you can get everything 'right' and still fail (eventually) due to a certain lack of flexibility. To be successful you need to be able to be sensitive to what will sell. An ok business will do ok for quite some time and can cope with an obstacle here or there. What then can happen is that two or three obstacles can appear together and there just isn't the resources to cope. If you are just breaking even or just making ends meet then you can be easily knocked out by a sudden negative change. The way to avoid that is to have a buffer of resources in place. Another word for that is cash and that comes from successful trading (not just doing ok). This can only happen if you have that flexibility and an eye for what will work. Why is it that in a street with several restaurants one will be doing fabulous and the others just ok? Its because the owners have hit on what combination of service, decor, food, etc really works. ...If you can work out how you get that edge...let me know...I need it.

Answer 4

Assuming all was done right to open the doors for a sound business with a sound business plan and plenty of stock for the Grand Opening... the number one failure of businesses is the after shock. Once the gala of opening is over and the money is counted, that's when business slumps happen. The worst mistake is not planning for that more then to be expected slump.

Answer 5

There are many business killers ,
No real 'worst' because any of them kill . . .

eg >

Choosing the Wrong location ( selling ice cubes in Alaska that might have sold well in Arizona)

Under estimating the funds necessary to operate until revenue increases sufficiently to support the business .

Not watching product quality ( nothing worse than a restaurant with spoiled food) .

Over estimating your future customer traffic . . .
Usually happens when someone observes anothers success and automatically sees $$$$$ signs and NOT the work required to make it happen ,
Or , fails to realize there is a thing called 'market saturation' .
A population can only buy so many movie tickets or shoes or whatever .

>

Answer 6

No business plan which outlines every single aspect of your business from start to future planning.
Not enough money to cover everything you need
Not assessing the market place for your business
Not looking into ways of advertising
Not having the right place or area you need to be in.
Not having the forsight to see that it is not nine to five and it takes 24/7 for a while.
Not able to see that a business takes approx 3 yrs if failing after that shut. 1st years learning, 2nd one learning and putting year one behind you and going forward year 3 should know if it is going to be business for life.

Answer 7

Lack of cash-flow is the reason today for the close of 70% of business within the first two years of trade. Bad planning never helps either.

Don't try to do everything yourself if you can avoid it. Surround yourself by the best professionals and nothing can go wrong.

And don't make assumptions, back up plan is the eight wonder in business.

Good luck.

Answer 8

Most of the time it is the location of the business that is most important. Those businesses that open in a market that is not conducive to the product or service, will most certainly fail. The second is mismanagement. People who open a business who do not understand how a business runs, will contribute to its ultimate demise. Good luck.

Answer 9

Being hasty with decisions.
In planning stages, 'Direction' is more important than 'Time'
Find out if other similar business make good profit.
Is there too much competion? your area?
Unexpected costs=approx 50% more than original estimate.
There will be a delay in money coming in because of start up.
ETC. Consult with Lawyers, insurance, etc.
Do your homework! Be thorough! Think of everything!
Only 10% of new businesses survive the first 2 years!

Answer 10

All of the above are great suggestions, but I think the biggest is, not have a solid business plan you stick too.

Also, market research. Make sure the product/service you are wanting to offer if actually going to be needed in the area where you plan to put it.

Answer 11

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