“As you begin formulating your winning plan, be wary of some of the common traps new entrepreneurs fall into:
Trap #1: Failing to Plan is Planning to Fail
Effective planning means more than writing goals on a piece of paper. It means taking personal responsibility to prepare you emotionally and practically to be a business owner. Unrealistic assumptions and poorly written plans communicate a lack of preparation to the investors.
Trap #2: Plan Your Exit- Do You Want a Business or a Job?
Many novice entrepreneurs create businesses that become their jobs rather than provide the freedom and passive income they dreamed of. As a result of poor planning, many new businesses generate little to no cash flow and require the full time effort of the owner. If your dream is to have both personal and financial freedom, plan to build a business that can at some point run itself and provide excessive cash flow.
Recognize that it often takes many years of blood, sweat and tears to get to that point.
Trap #3: Many Novices Want to “Do It Their Way”
By failing to educate themselves in the basics of operating a business, new entrepreneurs fail to surround themselves with a competent team of employees, advisors and mentors. They are solo players instead of team players.
Trap #4: A Winning Business Plan Is Not an Academic Exercise
Many businesses fail despite having beautifully written plans complete with optimistic projections. A business plan is not a school term paper. Yes, to get your plan read, it needs to be virtually perfect in appearance, format, layout and grammar. Unfortunately, in the real world, earning an “A” in appearance and forgetting to emphasize the thought and substance of a plan often results in an “F” in the area that matters most- a business with excessive cash flow that serves a purpose greater than money.
Trap #5: I Have the Best Product!
The world is full of great products and short of great entrepreneurs.
Successful businesses require great people first, great systems second and great products third.
Think about companies like Microsoft (Bill Gates), Dell Computer (Micheal Dell), And McDonald’s (Ray Kroc). Their success is a result of the passion of their entrepreneurs and the uniqueness of the business systems they created. In many cases, wildly successful companies have products that are high quality but not the best in the market.