Start-Up Mistakes to Lookout For!

Let's face it, every entrepreneur's first start-up is a fish-out-of-water- experience; new territories usually are. One of the best ways to tackle the unfamiliarity of business ownership however is to learn from those who have gone before you. Most entrepreneurs have a laundry list of things they've had to do, and redo multiple times before getting things right. Fortunately, we've got our laundry list of mistakes you should avoid to make your startup success attainable.

A Saturated Market

One of the more challenging tasks of being an entrepreneur is knowing how to reason with yourself and be honest in those responses. This is particularly true at the conception stage of your startup. You come up with an idea for your business, you believe in it, and you start investing time, energy, and resources to make your vision materialize. Finally, when you launch, you realize that the market is too saturated and your attempt to transcend your peers failed. Just like that, your business dissolves. Unfortunately, this is a common mistake.

When you have an idea for a startup, it is imperative to implement a market research component that facilitates your place in the designated industry. If you haven't invented something it is more than likely the case that your business idea already exists. Know who your competitors are, how the market is performing, and whether it makes sense to invest in a business idea that has seen one too many launches.

Launching too quickly or too slowly

 

Having a new business can be exciting and that excitement can persuade you to place your product or service in the hands of consumers as fast as possible. Prematurely launching your business can kill it. There is nothing quite like introducing an ill-prepared product to a consumer. On the other hand, it is equally detrimental if you have a successful product and you are unable to keep up with the demand for it. Take some time and nurture your idea to control for foreseeable outcomes like these.

It is also possible to launch too slowly. Some startups require a large amount of preparation time. Research, testing, and funding are among the primary factors that can delay a launch. However, if you are taking too long to make your business accessible, perhaps it has no place in the market. Otherwise, you're hurting your business if you withhold something that is on demand and is necessary to your consumers. They may stop waiting. If you are slow to launch, there should be substantial reason.

Poor Investment Strategy

Every business wants to grow, but that growth is heavily predicated on how money is managed. Your business should be your investment manager's priority. Monitor the monetary flow and forecast of your startup to effectively regulate where you can make more money and where you should pull back a bit. Further, investments should yield growth and this should not be interpreted as investing solely in the interest of shareholders. Investments should also be made in favour of consumers; they make the business. “If you invest in your users, your investors will benefit regardless”.

No Target Audience

It's unfortunate that some startups fail due to the lack of a clear and definitive consumer. Knowing who you are selling your product to is instrumental in startup success. A designated target audience helps drive marketing and promotion strategies, product development, and sale projection. When you have a target audience you are aware of exactly where to find your market and how to control it and be competitive. On the other hand, failure to determine a specific group to which to market your product can result in financial loss and over-investment.

A Divided Team

Lastly, if your team does not share your vision, you are doing a disservice to your business. Hire like-minded people who share your values, but differ in creativity and skill; this will diversify and enhance your business potential.

Starting a business can be intimidating, but minimizing your mistakes can make the ride a little less bumpy and a little more successful. 

Negotiate From a Position Of Strength

In business, as in life, your skills as a negotiator will occasionally be tested. By concentrating on five fundamentals in particular—preparation, factual agreement, rapport, active listening, and common interests—you can greatly improve your prospects for success.

A negotiation strategy can’t succeed in advance, but it can fail in advance.

There is arguably no more important component of a negotiation strategy than preparation.

Start by envisioning the negotiated outcome to which you aspire, and understand why it is desirable for you. Identify your must-haves. This will enable you to distinguish areas where you are willing to compromise, from areas where you are determined to stand firm.

Your preparations for a negotiation should include research into the other party and h/er interests. Try to identify the outcome the other party desires, and issues on which you think s/he may be willing to compromise.

Finally, it is important that you clarify the terms and process of a negotiation at the outset. Who will be present at the meetings? How long are the negotiations anticipated to last? What does the other party’s chain of command look like, and who will sign off on the final decision? Are there key dates upcoming, deadlines, or other technical details that need to be established?

Make sure the other party is willing to agree, in writing, to the terms of the negotiated outcome. You want to avoid a situation where the other party unilaterally re-opens negotiations that you thought had concluded.

Establish consensus on key facts.

Negotiations tend to be deliberate and can be mentally taxing, so it’s helpful to reach agreement on the facts, and thereby avoid unnecessary discord and delays.

Over the course of the negotiations, information may come to light that is new to you. Should this occur, make a note of it and try to verify it. Call for a pause in the negotiations if necessary. Don’t accept a consequential “fact” that you don’t know is true, or an interpretation of reality you can’t endorse.

Just as importantly, both parties to a negotiation must have realistic expectations—including an understanding of the conditions that each party faces.

If, for example, a manufacturing subcontractor cannot fill an order because h/er factory has sustained significant damage in an earthquake, a well-informed manager of the retail firm that placed the order won’t attribute the shortfall to the subcontractor’s incompetence or negligence. A shared understanding of facts on the ground, including risks and potential causes of delay, is often essential to maintaining positive professional relationships.

Build rapport.

This involves getting to know one another personally, ensuring that all parties are on the same page, and managing or de-escalating conflicts. Rapport has verbal and non-verbal components; body language plays a central role.

Progress in negotiations tends to be especially difficult when there is hostility between the parties. Small talk can help to break the ice, but in some cases, this approach simply won’t be adequate. Some basic conflict management techniques can help you move forward in negotiations, even if you aren’t particularly fond of your counterpart.

•  Avoid making provocative statements that may cause your counterpart to shut down or become defensive.

•  If your counterpart makes such a provocative statement, express your lack of appreciation therefor, but suppress the temptation to retaliate in kind.

•  Maintain non-threatening physical posture and body language. Speak calmly and slowly, and de-personalize the source of conflict—for example, “This situation makes me uncomfortable.” rather than “You are making me uncomfortable.”

•  If necessary, take a break, and return to the topic of contention once you and your counterpart have both had an opportunity to regain composure.

Listen actively.

Active, attentive listening enables you to ascertain your counterpart’s wants, needs, goals, and any other relevant information s/he may have to offer. It also allows you to hold h/er accountable for any changes in h/er position that you haven’t acknowledged or agreed to. Your priority in negotiations should not be to catch your counterpart off-guard, to exert control, or even to “win”. Rather, your main aim should be to safeguard your own interests with an approach that emphasizes listening, critical thinking, and strategic dialogue.

Seek out common interests.

Ultimately, the goal of all parties to a negotiation is the same: to obtain something they desire, while sacrificing as little as possible. Because desirability is partly subjective, successful negotiations among equal partners can often result in a “win-win”.

A sure way to achieve real, substantive progress in a negotiation is by focusing on shared interests and ambitions. Once you know where your common interests lie, you will find it easier to iron out the details of any compromises that may be necessary.

Lessons From the FIFA World Cup

Business owners around the world are breathing a collective sigh of relief now that the grand spectacle that is the FIFA World Cup has come to a close, signaling, at long last, that it is back to business as usual. Although soccer doesn’t have the deep roots in North America as it does in other parts of the world, the FIFA World Cup is widely regarded as the planet’s most important and widely viewed sporting event, and one reaches a truly global audience. The World Cup only takes place every four years and this year’s host nation, Brazil, is the country whose economy is most directly affected by the tournament. But the month-long tournament also has enormous economic impacts on other countries as well. Some of the numbers related to the tournament (mostly concerning the US economy), provided by InsideView are staggering. For example, 80% of the world’s population will watch some part of the World Cup; the US, it is estimated, lost $390 million in productivity during their group match game against Germany alone; and the World Cup will cost the British economy 250 million working hours. During the World Cup, quite literally, the world stops.

Where is all this productivity lost?

The biggest area affecting productivity is from workers who actually take sick days in order to watch their nation compete in games. But it gets worse. An estimated 10% of workers will come in late for work having stayed up late to watch the games. And who knows how much time and productivity is lost from workers sneaking a peak during working hours or just conversing about the tournament. All in all, as far as productivity is concerned, the World Cup amounts to a colossal distraction.

Steer Into the Skid

Some business owners’ strategies, in light of these statistics, can be to implement draconian-like policies for the duration of the tournament. But, some business owners are finding that the best solution is not just to not fight it, but to embrace the tournament, and see it as an opportunity to enhance other aspects of the business. According to Mercer research in four Latin American countries, it showed that on average over 87% of businesses are willing “to be flexible during the World Cup in offering employees short-term benefits that may have a positive impact on long-term productivity and morale”.

Specific Strategies

Many businesses are coming up with ways to make the World Cup accessible to their employees while keeping a steady workflow. They include things like allowing employees to leave work early or be flexible with their working hours, watching their nation play while working from home, and even equipping their break rooms with TVs that show the games.

The Lasting Impact

A recent Forbes article even found that the World Cup can actually have a positive impact on the bottom line of a company by boosting morale. Neal Taparia, Co-CEO of Imagine Easy Solutions, described the buzz of excitement around the office by their policy of embracing the tournament and playing all of the games in one of their conference rooms, suggesting that it connected employees to each other and to the products they design.

There’s much to learn from the World Cup, as it will surely test employee commitment. At the end of the day, the World Cup is never the difference between success and failure, but reveals much about the connection between the management and the employees.

Links to studies and works referenced in this article:

http://blog.insideview.com/2014/06/26/2014-world-cup-productivity/

http://www.mercer.com/insights/think/2014/world-cup-versus-productivity-compromise-is-the-goal.html

http://www.cnbc.com/id/101766632

http://www.forbes.com/sites/groupthink/2014/06/25/watching-the-world-cup-will-increase-office-productivity/

Key Components of a Manufacturing Production Plan

If you’re in the business of manufacturing a product then you need to develop a thorough production plan. That applies to everything from making “widgets” to sandwiches. The type of effective production plan depends on your business model. It will help if you can hone in on what type of manufacturing production will be most beneficial to your business. Based on that answer, you’ll be able to make informed decisions about inventory, material purchases and transportation. Consider which of these production plan strategies apply to your business:

The Demand Matching Strategy

This type of manufacturing applies to a company who is only making a product to exactly match the demand for that product. A restaurant only makes a single meal when a customer orders that meal. They have all the ingredients on hand for the meal but don’t go into “production” until the order is placed.

The Level Production Strategy

In this plan, a company will make an average number of products to match a projected demand for those projects. This is a consistent approach based on tangible order numbers. If that restaurant sells an average of two dozen chicken dinners every night then it makes sense for them to prep two dozen chicken dinners every night in anticipation of the orders.

The Stock Making Strategy

This strategy involves making product before a customer would place an order. The benefit of this plan is the ability to make a master production schedule that will determine a specific set of goals per manufacturing run. You’re going to make 100 widgets every day to meet any anticipated demand over the year.

Once you have settled on the type of manufacturing strategy you’ll be adopting, you should plan out a production schedule. Don’t guess as how much time or labor would be involved in making a product. You should conduct test runs of the manufacturing process to get a baseline for those facts. That will help you estimate what a typical run of a product will cost in terms of time and work force.

The test run can also help you develop a schedule for ordering supplies. If it takes a single day to create a product and you plan on having a consistent five day run then you can figure out how much materials you need on hand to complete an order. It all comes down to a matter of organization and scheduling. Don’t leave anything to guesswork.

Keeping a Handle on Your Business

Operating a business successfully has often been compared to a high-speed train. When it runs at peak performance, it arrives at its destination on time. However, if it sits unused in the station, or is not maintained properly, it will cease running well and ultimately break down and fail completely.

Studies have shown that more than half of large business failures result from poorly designed business strategies. Many business leaders have the drive and desire but fail to properly assess the market or their abilities. It is not uncommon for a thriving business to adopt a new idea on the assumption that their notoriety alone will make it happen. "Biting off more than one can chew" has led to the downfall of many business giants.

Another common, and sometimes fatal, error is operating without any accountability. Even the boss has to answer to the board. When decisions are accountable, it makes them open to review by others and allows other sets of eyes to detect possible flaws. The smallest of companies – even one-person operations – should consult with someone else on major decisions. After all, none of us is perfect.

Sometimes change is necessary. Companies that have dominated certain markets have to change with the times or market conditions if they want to maintain their position. Failure to adapt can be suicidal, as there is always someone waiting in the wings to pick up the slack.

Leadership is a 24/7 position. Your employees look up to you and receive their inspiration from the top. A strong leader motivates by example. Failure to convey positive attitudes and emotions can lead to the downfall of your business. Even if your business takes a downturn, you need to continue inspiring your employees to work together with you to overcome. If you appear downtrodden, you can't expect your team to pick you up. The ship will go down with its captain.

Keep a handle on your business by charting your goals and progress. By maintaining control of a situation, rather than it’s controlling you, your train will speed forward to its next destination.

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