Common Mistakes Entrepreneurs Make

6 Common Mistakes Entrepreneurs Make
Part 1

I’ve been around entrepreneurship my entire professional life. I’ve seen great success in all manner of industries – but more importantly, I’ve seen a lot of businesses struggle and even fail.

For this reason, I’ve put together this list to act as a check so that you can avoid making the same mistakes that many other businesses have.

Mistake 1: The business doesn’t start with the end in mind.
From day one, you need some sort of a plan. It doesn’t have to be complicated, it doesn’t have to be long and detailed and it doesn’t even have to be permanent. What it does need to do is exist. You can change it as much as you want later, but initially, how you want to end says a lot about how to plan your direction.

Do you want to sell the business? Then you need to keep close track of all of your financial documents and filings from day one. Do you want to pass on the business to a family member? Then you’re going to want to get that family member involved as soon as possible to foster familiarity. Do you want this to be temporary or long term? This will influence how you conduct your day to day operations. All of these factors need to be considered when putting together your plan.

Mistake 2: New businesses don’t make clear WHY they do what they do.
So why did you decide to start your company? There are an almost infinite amount of reasons to start a business. Whereas some are better than others, it’s still important to know at the core why you’re deciding to do this. Do you think that you can improve upon a product or system? Do you genuinely think that there is a market or space that you can occupy that isn’t already occupied? Or if it is, is your concept disruptive enough to carve out your own space?

Even a distaste for a former employer can be a good reason to start your own business – and many people have started businesses for just this reason – only make sure that you are able to answer the above questions so you don’t dig yourself into a hole you can’t get out of.

Mistake 3: The business either has no plan or its plan is too rigid.
Without a basic roadmap, you will have no way to gauge your progress. Are you accomplishing your goals in a timely manner? Should you be pushing harder or are you already pushing too fast?

Along with this plan comes a budget. A budget allows you to set up your expected spending and then you can assess if it’s too little, too much or just right.

The real benefit to both of these concepts is that you can review your actual performance against your goals. It also helps you to see what you can and can’t eliminate in order to be more efficient. One of the biggest and most important reasons to have and stick to a budget is that if you ever wish to sell your company, you will need every single piece of your financial background to show.

These are three of the more basic mistakes that many entrepreneurs make. Don’t let yourself get bogged down in minutiae, but make sure that you do your due diligence in keeping your books, making a plan and sticking to it. Hopefully, we can all learn from these common mistakes.

Stay tuned for part 2 of this list to come out soon!

Have you had to learn any lessons the hard way? Leave a comment below and let us know about your own successes and failures.

International Growth for Canadian Businesses P2

Should Your SME Expand Internationally?

Part 2 of 3

 

When we last left off, we were discussing the situation surrounding Canada. With a retiring Baby Boomer population and current market trends, we are headed toward a technical recession. It’s going to be imperative for the survival of SMEs all over Canada to turn to international markets.

 

Some Examples

Let’s take a look at two possible markets.

 

Market A:

  • Population of 300 million
  • Speaks English
  • Struggling to grow
  • Consumer power has decreased
  • Extremely competitive
  • Has seen a many-fold increase in its trade with the Asian economy & other emergine economies
  • Keen to increase its trade with emerging markets

 

Market B:

  • Population of 1.2 billion
  • Speaks English
  • Fast-growing consumer base
  • Fast-growing population base
  • Keem to bring in international brands & “know-how”
  • Inherited links with the Canadian Market
  • A centre of technological advances

 

When given these two markets side by side, which one would you think is better for Canadian SMEs – Market A or Market B? Would it surprise you to find out that market A was the United States and market B was India?

 

The Truth About India & China

The middle class of India is the fasted growing in the world with over 400 million people. More people in India speak English than in the combined populations of America, the United Kingdom and Canada. The official language of the government and business in India is even English.

 

Another fast growing market for SMEs is China. While some say it might be slowing down, the middle class in China has an incredible growth rate still larger than the US and Canada combined. They manufacture everything in the world and are the biggest buyers of tourism services in the world. Due to deregulation of markets and social structure of small families, the Chinese middle class has vast buying power and disposable income. On top of that the US owes China more money than is available on hand currently.

 

This is readily demonstrated by strong Vancouver and Toronto real estate markets in Canada that are still booming due to investments from Chinese and Indian investors as opposed to rest of Canada.

 

More Emerging Markets

Another fast growing market is Dubai and the adjoining region known as GCC. Together they have a population of 47 million, a GDP of $1.6 Trillion and a GDP per capita of $33,300 with combined inflation of 2.5%. This region also happens to own around 40% of global oil and the largest gas reserves in the world.

 

Combined, they operate the largest network of airlines, the busiest airport in the world, one of the top 3 duty free shops in the world, and one of the highest RevPar (Revenue per available room) for hotels in the world. They will host two global events in the next 10 years and be home to many global sports events.

 

The area is within 4-8 hours of flying time to the world largest land mass and most populated countries such as India, China, Egypt, Turkey, and the East and West African states. Dubai’s proximity leads to a growing economic hub for the adjoining regions.

 

Even in the global recession, these markets grew at a 4-5% rate.

 

Also consider that 45% of the population was born in the 1990s. They are now old enough and ready to buy goods, cars, utilities, houses and everything else that consumers demand. This generation is forcing governments to build infrastructure at a scale never seen before.Trillions of dollars are continually funneled into current infrastructure projects.

 

Nearby, Turkey is another fast-growing economy which doubled its GDP between 2002 and 2014. Oddly enough they were denied entry into the EU in the early 2000s; however, since then, they have witnessed growth like has never been seen before. Not becoming part of the EU was a blessing in disguise. Otherwise they would have suffered a fate similar to PIIGS (Portugal, Italy, Ireland, Greece, Spain)

 

This generation especially, has a penchant for luxurious high-end products. They want to wear brands on their fashionable sleeves and keep up with the rest of the developing world. This need is leading to the fastest growing retail markets in the world. Gross leasable shopping areas tripled in the past twelve years. European and US brands litter the market. But Canada remains missing.

 

Economically speaking, Canadians are struggling. The sooner we accept that reality, the better.

 

The sooner we overcome our shock, the sooner we can start looking for opportunities and focus on growth and value building. A recent RBC paper indicated long economic struggles for Canadians as close to one million Baby Boomers will retire.

 

More importantly, close to 700,000 SMEs will come up for sale or go through transformation as their founders retire. This brings us to the core question: Where is growth going to come from?

 

Growth is not going to come from Canada or the US. Growth will come from EMERGING MARKETS.

 

Next in the series, I will explain HOW SMEs can connect internationally. Until then, have you experienced any international engagement with your business? If so, let us know in the comments below!