Common Mistakes Small investmentes Make and How To Avoid Them
Unfortunately very few start Mothman investmentes make it beyond their 3rd year. Failure is usually down to ironman movie number The Goodies clearly identifiable mistakes, which if small investment owners are aware of, can increase their chances of survival.
Here are the top 10 common mistakes which small investmentes tend to make.
Lack of Market Research
When a budding entrepreneur comes up with an idea for a new investment he assumes that because he would buy such a product or service then everyone else will. This may be the case for day-to-day necessities but for other items this is usually not so.
Its important that when you start up you carefully research the market to check that:
There is demand at a level which would lead to a sustainable investment
People are prepared to pay the price required for you to make a decent profit
Undertaking market research may appear time consuming but the effort will pay off.
Poor Record Keeping
Some investment people are not born administrators; they feel more comfortable getting out there and doing the investment. Paperwork is too easy to ignore but can never be put off indefinitely.
Sales, purchases and other expenditure must be carefully documented, so you know if you are making a profit or not. Invoices must be issued on time and chased up promptly if there is a delay in payment. Its all very well having the sales but poor record keeping can hold you back.
Having your paperwork in order will also save you time when it comes to your accountant doing your year-end books!
Insufficient Capital
When starting off its easy to decide what capital is required for fixtures and fittings, machinery and stock. What many new investment owners forget about is the cash needed to fund day-to-day requirements, i.e. cash to pay expenses before your clients pay you. This is known as your working capital requirement.
Small investmentes can fail because they have insufficient cash to start off to meet these immediate expenses. If you wish to survive make sure you set aside enough cash to meet all your needs for the first few months.
Ineffective Marketing Or None At All
You cannot afford to treat the cost of my blog as an unnecessary expense. A investment with no marketing is like waving in the dark you know you are doing it but no one else does!
There are many ways to promote your investment on a small budget; its just a case of being inventive and creative. What ever you do, dont assume that people will quickly know you are in investment they wont, unless you tell them.
Ingoring Changes In The Market Place
As a small investment owner its very easy to get immersed in your investment and not see what is happening around you in the market place. Always keep your eyes and ears open to what the competition is doing and what your clients want. Dont get left behind.
Owners Attitude
Attitude is everything in investment. Dont forget that the real boss in your investment is the client. Running a investment may make you feel important but dont let this develop into an I am better than you attitude. Do this and you will quickly chase your clients away.
Spending On The Wrong Things
Being in investment can be exciting, especially as the cash starts to roll in! However, dont be tempted to spend it on a new car, a house or just a good time. If you are to own a successful investment then you have to keep some cash back to fund future growth. A investment cannot grow without cash, so commit to spending investment money on the investment.
Dependent On A Small Number Of clients
Dont fall into the trap of setting up a investment just because one person says they will buy from you every week or month. Setting up and running a investment, which is dependent on one client, is not a recipe for success. What happens if, one month after you have spent all your cash to set up your investment, that client says he has changed his mind and has decided to buy elsewhere? Unless you can find other clients very quickly you are faced with closure.
Before embarking on a new venture make sure you have a sufficient number of clients such that if a few go elsewhere you can still continue trading.
Growing Too Quickly
Surprisingly, growing too quickly can be a problem. You have to be disciplined enough to only take on work you can handle. If you are tempted to accept too much you could end up Florida Lemon Laws not only the new client but also your existing ones.
Also, dont under-estimate the impact rapid growth can have your administrative burden. As I mentioned earlier, getting behind on the paperwork can have an equally damaging effect on your investment.
Trying To Do Everything
Finally, the problem most small investment owners have is the fact that everything falls on their plate. Inevitably this is how its likely to be in the beginning, when the limited budget means that staff are a luxury, but as the investment grows be aware that you cannot continue to do all tasks. There will come a point when you become inefficient and not have enough time to complete everything in sufficient detail. Taking on an extra pair of hands will increase your costs but you will be surprised at how much time will be saved, allowing you to do what you do best getting the investment in.
Take a look at each of the mistakes and make sure that you dont fall into these traps.
Small investment Success is a resource dedicated to helping small investment owners be more successful. If you are looking for a regular flow of ideas and tips then subscribe to Small investment Success a free newsletter, which provides you with quick tips, ideas and articles. Visit target="_new" smallinvestmentsuccess.biz">smallinvestmentsuccess.biz
posted by cindyjcycre @ 8:33 AM
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