For many people, the answer boils down to that it is just a business that reports financial profits in the short term, without too much effort and with a small investment. However, nothing could be farther from a correct definition of what it is.
In reality, although the ideal business must take into account that the needs of the consumer are adequately met, it must also consider, first and foremost, if the entrepreneur has chosen correctly what his ideal business is. If there is no correlation in this regard, setbacks are to be expected and, what is worse, failures.
First analyzing the entrepreneur’s possibilities, and secondly analyzing the business he is planning to establish, is what will allow the former to devote himself successfully to his ideal business.
Premises for choosing the ideal business
In Havana today, there is a creative photography school under the direction of a seasoned professional whose motto is: If taking photographs is not fun for you, this is not the place for you. In short, whoever wants to establish the ideal business must be legitimately inclined towards it, to the point of even becoming his passion.
The foregoing leads the entrepreneur to be consistent with himself and, therefore, display his maximum creativity so as to not only be highly competitive in the market, but also achieve his aspirations and, very importantly, meet the material and spiritual needs of his customers.
What has been stated here thus far makes it possible to aver that the ideal business does exist. The thing is to find it and, of course, take into account the mistakes that frequently happen when it comes to launching a business.
Learning from others’ mistakes
In the business world, there are two ways to learn: the easy way and the hard way. The hard way is to learn by making mistakes. The easy way allows us to take experience into account and learn from others' mistakes in order to avoid them.
How to avoid mistakes when starting a business
a) A person may become unemployed and then decide to start a business for the mere reason of obtaining his own source of income. In that case, desire or having the initial capital is not enough. Since the future entrepreneur lacks experience and know-how, he has no alternative but to seek guidance and to get training to make his way in this new endeavor. This step implies, among other things, knowing the target market for a specific product, in addition to its competitive advantages and how to manage the business effectively.
b) On the other hand, experience has proven how difficult it can be to get a business off the ground if you have the wrong partner, even if it is a family member or a friend.
With regards to this point, it is advisable to have a partner who is truly capable of successfully conducting the business you plan to open. This is an indispensable requirement to avoid failure.
c) When starting a business, it is necessary to know very well how to deal with fixed expenses and how to finance some variable aspects that allow it to run smoothly. Otherwise, it is very likely that the business may not survive even its first stage of existence.
d) Marketing specialists affirm that the secret to a successful retail business boils down to location and parking.
e) A common mistake when starting a business is to gear it towards every consumer that makes up the market as if they were all the same and, therefore, totally receptive to the product or service being offered. Given the broad and varied nature of the market, it is not profitable to target all consumers that comprise it; instead, the most efficient approach is to divide the market into segments; i.e., to target a single segment thereof exclusively.
f) Acting impulsively, without doing the due diligence required, leads to business failure. It is necessary to know every detail of the business one wishes to establish; therefore, aspects such as location, competitors, where to find resources and how to obtain the required permits and licenses must be taken into consideration.
g) Your products will never be competitively priced if you do not know what the competition is doing. The foregoing entails conducting in-depth research of what the competition is doing before you open your doors to the public. Find out who is selling the same products or offering similar services. It will also be necessary to find out if other persons are interested in penetrating the same market.
h) Technology may certainly do wonders, but it is no substitute for a good relationship with both customers and employees. It will always be an efficient tool, but it will never replace training and personal motivation.
i) It is not a good idea to bite off more than you can chew. In a nutshell: it is not advisable to attempt to skip the phases that form a part of many businesses, and the observance of which guarantees an efficient administration.
Even major companies plan it step by step, which allows them to concentrate on each part of the process.
Some good advice: start small and let the business grow.
j) It is important to focus on profits instead of focusing on sales volume, since not all the money that is collected is profit. The latter only takes place after deducting the costs related to the abovementioned income.
Likewise, financial terms must not be underestimated; i.e., money running out before obtaining revenues from the sales of products or rendering a service.
How to prepare a successful business plan.
Without previous research, the entrepreneur would have no compass to prepare a business plan that will lead to success. This research must focus on these fundamental aspects:
1- The customer and the market.
In this respect, the following should be taken into account due to their usefulness:
- Potential customers and their characteristics.
- Where can you find them and how can you obtain information on them?
- Do they have purchasing power to buy?
- Will they buy? Why?
- How much can they buy? (Market size or value).
- How can I communicate with potential customers?
If the customers are businesses, the following questions must be considered:
What size is it?
What purchasing procedures do they use?
What can I offer them so that they buy my product?
Normally, who makes purchasing decisions?
2- The product.
On this point, it is good to find out:
Does it meet a real need of a sufficiently large group of persons?
What is its production or purchase cost?
Would the price at which it would have to be sold competitive?
To attract potential customers, can I add some feature to it that will differentiate it from what is being offered on the market?
What would be the total product design: presentation, types, sizes, packaging, brand, registration...?
Suppliers must also be taken into account because the quality and cost of the product, as reflected in the sales price, depend on them to a great extent.
3- The location of the business.
With regards to the characteristics of the location where the business is to be established, the questions here are:
* Is it visible?
* Is it very accessible to customers?
* Does it have sufficient space and does it have the necessary utilities?
* What is its traffic density?
* Is there parking for customers?
* What is the lease or purchase cost and terms?
* What regulations and permits apply to its use?
* What other types of businesses are located in the area?
* Are there vacancies in the area? Why?
* What adaptations would have to be made and what would be their cost?
Finally, everything that is suggested above may be summarized in one suggestion.
In ancient Greece, opportunity was represented as a bald goddess with wings on her feet who would appear and disappear fleetingly without those interested being able to grasp it.
Don’t let that opportunity pass you by. Grab it!
Bibliography
Ricardo Candela Casas. Mitos sobre emprendedores. Parecen, pero no son. Digital version, June 2008. Lima, Peru.
International Labor Organization (ILO): Generación de idea de negocio. Manual de capacitación para futuros empresarios. 1999. Digital version.
Michael E. Gerber. E-Myth Mastery (El mito del emprendedor). Collins, 2007.
Various authors. Los errores más comunes de un emprendedor. Mencey Capital Management SarL.
Diez errores más comunes al planear un negocio. Jaime Leal article published on January 7, 2013. Available at: http://www.jaimeleal.com/conferencista/10-errores-plan-de-negocios
Errores comunes al iniciar un negocio. Article updated on March 4, 2012. Available at: http://www.crecenegocios.com/errores-comunes-al-iniciar-un-negocio/
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In this section you can find articles dating back to a certain time period that are still very relevant in the business world.