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Business Mistakes: 7 Costly Ones You Must Shun

Business Mistakes - 7 Costly Ones You Must Shun

There are many business mistakes an entrepreneur will make if not given proper guidance. I have made many of them and want to show you how NOT to make them.

My business mistakes are very many. I started my first business venture on my first year at the University of Benin. The business was a product of a need I discovered and an innocent question that I asked on the spur of the moment. I noticed that the demand for Engineering drawing boards was higher than supply that particular year because many of my friends who were engineering students were talking about their difficulty of finding to buy. I did not get excited. It was just like another gist to me.

On my way home from my bus-stop at Sakponba Road, Benin City that evening, I decided to take a short cut to Unueru Street via Unueru Quarters. That was when I met a young man stacking drawing boards and tieing each bundle of about 10 boards with ropes. I happen to have known him for a while because my family had lived in Unueru Quarters before. Without thinking, I walked up to him. I asked him if his dad also made drawing boards (I knew his dad made furniture). He said yes and added proudly that he also makes drawing boards now, after each school day.

Well, I asked him to tell me the rate at which they will supply me drawing boards. He said his dad will give me a particular rate. But he would give me at a lower rate. We “sealed” the deal and my business started. I sold loads of drawing boards and always had money. But the money was only seasonal because by the following semester, everyone had acquired their own drawing boards.

Since then, I have done many other businesses and today, I run a bunch of businesses. I have made a bunch of business mistakes and I want to share a few of them with you here. I guess the top of the list (or the ones I remember the most) are as follows;

Business Mistake 1: Going into a business partnership without an agreement

It was about 8 years ago. She is someone I respect and admire a lot. She is very spiritual and has a very strong sense of purpose. I went to visit her in her office on a fateful day. This was a few years after we left the university. Well, I told her that this is what I have passion for right now and will like to start a business around it. She excitedly showed me where she had written exactly the same thing as part of her plans. We were both excited. After a few meetings, we agreed that we are going to start a business together.

Lets cut to the chase. Same year, we made a lot of money and things began to go sour. For some reasons I do not want to share here, I wanted out by the 3rd year or so. It dawned on me too late that even though both of us are good people (she is actually amazing!!!), the partnership was not right. It was built on sentiments. No agreement. No terms and conditions. No reprisals. Nothing! We were both bosses and that’s all. The partnership ended in a very bitter way. Thank God we are still friends because it could have been worse. This is one of the most costly business mistakes ever.

Even if you are going into a business relationship with your father, mother, brother, sister, boyfriend, girlfriend, pastor, imam, best friend, classmate, and so on, ensure there is an agreement that binds both parties together. Watch out for a more detailed post on this.

Business Mistake 2: Starting a business with only a mental plan

Until recently, I have always started businesses with only a mental plan. The only time I wrote a business plan in my early years of business was when I was starting Triumph Magazine.

A mental picture will not do. It has to be documented. Write down every detail you have on your mind about that business. Then use what you have written in addition to a business plan template to create a business plan. The beautiful thing about writing your business plan (by yourself) is the fact that you are going to learn a lot in the process.

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As I mentioned in my post earlier today, many of you said you prefer if the posts were shorter so that you can quickly read and get back to work. So, I will stop here and release the remaining part of this post tomorrow.

 

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