Some of my friends who started their small
businesses had little or no experience, as was the case with me, and just
jumped in. Luckily for us, it turned out just fine.
However,
over the past couple of years, I have held countless business discussions with
Emirati entrepreneurs about their experiences, and even though they are doing
well now, many have made the same kinds of mistakes along the way.
With careful planning,
some "rookie" mistakes can be avoided.
One of the most
frequent errors of a retail entrepreneur is trying to keep the rent as low as
possible, such as opting to open a store in a non-commercial area of Abu Dhabi.
The main target for
businesses is to keep their expenses low, right? Not necessarily. Sometimes it
is worth paying a higher rent if it increases the number of customers, enhances
the business's reputation, or makes dealing with suppliers easier. In the world
of start-up businesses, a small mistake regarding location can be fatal.
Hiring someone you
trust and know is not always the best option, either.
When it comes to small
businesses, competence should be the watchword. While hiring friends and family
has its benefits in terms of trust, it limits the pool from which you can
choose qualified managers or employees.
Friends and relatives
can also carry baggage and may take you for granted, or slack off on the job.
They can also be hard to manage and even harder to fire.
Another common mistake
is with pricing. Keeping the price on products "reasonable" might
sound nice, but it is not nice for your profit margins. Why not pick a price
that will allow your business to flourish?
A friend of mine
established a clothing line and decided to underprice her designs to attract
business. Doing so, she did sell but only barely covered her costs. Now she
wants to hire an employee to help her out, but she realises that she will not
end up with much of a profit after the employee is paid. In her case, it may
even mean a loss.
Buying second-hand
equipment to minimise expenses is not always smart. It works in some cases, but
in many others it is short-sighted.
For example, buying a
delivery vehicle with more than 200,000 kilometres on the clock may cause you
to waste time and money fixing the vehicle instead of catering to your
customers. You want to generate business. Can you really afford equipment
downtime?
Moreover, an overdose
of love for your product could kill it. I am all about being passionate about
your small business. That is what made mine successful, but it does have its
downside.
Make sure that your
passion does not lead you to make a bad decisionand that it does not blind you
to the fact that even though you love your product, it may not necessarily have
customer appeal.
Something else to
watch - saving money on professional advice and instead listening to your
friends is not always wise. Unless your friends are business consultants or
experienced entrepreneurs, do not even go there. You may save money in the
short run, but it could end up costing you more, perhaps even your business,
down the road.
Moreover, do not just
count on consultants' views, but join a business group, talk to successful
entrepreneurs, buy some books about real-life stories of business success.
Check out Tamakkan and ThinkUp, websites that are a platform for successful
entrepreneurs and talent in the UAE and the region to share their success
stories.
It may be difficult to
decide which advice to take, but no one said entrepreneurship is a piece of
cake.
Finally, avoiding
borrowing does not always mean you are being prudent. Yes, in some cases,
borrowing can be unwise. But if borrowing money is likely to guarantee your
business's success, go for it. Borrowing is not always irresponsible or
foolish.
Graduating from rookie
status can take more than a year, so be patient. To make progress faster, try
learning from others.
When you learn from
your mistakes, that is when you are not a beginner any more.
The above article was featured in The National Newspaper, submitted by Manar Al Hinai, who is an Emirati
fashion designer and writer, and who can be followed on Twitter: @manar_alhinai
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