Lack of planning.
That seems obvious doesn’t it, however, you would be surprised how many people in business have an idea in their head, go and do it, without sitting down and making certain that they have properly planned it.
You see when they have this super idea or try to add a great new market to their existing business, they become so convinced about it and certain that it will help their growth that all too often they just go and do it, with terrible consequences.
This problem usually raises its head after the new business has been operating for around a year, it is growing, may even have just become profitable, and instead of letting the business develop and grow in the way they planned it, suddenly they have this great idea. They know it will take the business towards their dream so much quicker, that they embark on this route without really thinking, and then it all goes terribly wrong!
It is a story I have come across many times, we all become invincible in our heads, but don’t let it happen to you.
Write your ideas down
Keep getting good ideas, always write them down on paper. Once you have done this and are still certain that it is a great idea, take it apart section by section, then create “A Project Plan” of exactly how each bit will be achieved.
Once you have done this and if you are still certain it will work, do a cash flow chart on the money required and how quickly it will take to increase the profits of the business.
If after all this, you think that it will still work, put it away in a drawer and when your bank account shows it has the funds required for this venture, then and only then take the business plan out of the drawer and see if it still makes sense.
Don’t get so excited and go looking for money immediately, do it from your own funds, carry out this expansion without borrowing money, it is safer as it means that if it does fail your business will not fail with it and you will have learnt something.
That’s Think Cash!
Tony Dalton is a well respected business Mentor covering the Midlands and Warwickshire area. Click here for more information on Tony and "Think Cash"