1-What is the main mistake committed by many entrepreneurs when starting a new business?
Every new entrepreneur dream of launching a new product that is a total novelty, a boldness of thought and a fruit of his intelligence and creativity. He knows many stories of entrepreneurs who got rich with a new good idea. However, they forget that most of new companies die in their first year of life and the number of failures is much higher than the number of success. Do not start a new company to show your creativity. Save your money and avoid frustration.
2-How to choose the right type of business?
Recommendation # 1
Copy what other successful companies are doing until you know the market quite well.
Summary:
-Do not innovate at the very beginning of the company.
-Never offer new products at the start.
-Advertise the same way your most successful competition.
-Sell successful products or start business similar to already successful business.
-Use the same advertising media as the most successful companies are using.
-If you try to sell a product that few companies are selling, your chances of success are very few.
-There are many successful stories of products that were real novelties but for every case of success, there are hundreds of failures. However, large corporations achieved most of those successful products after a long series of failures.
Why the above recommendation is correct?
1- Because brilliant ideas generally do not work in most business areas. Psychologists say that the best business administrators do not have creative minds nor generate brand new ideas. They choose among ideas suggested by others.
2- Only large corporations have the money and time resources to invest and test new products or companies and wait until a great many tries bring in the expected profit. Generally, those tests are performed by professionals with large experience and highly qualified and it is very unlikely that someone without experience in that market can find out an excellent product or a new market.
3- The newcomer does not have enough information on products that have already been launched tried and failed. And also on companies that have been started and shut their doors etc. They also do not know the market.
4- The pioneer has the cost of the test i.e. a series of failures up to the point to find out a product or a company. The followers do not have those costs.
Hint:
When copying a company be very careful to gather all important facts.
3-How to start a business if I have very small financial resources to invest?
-Start part-time and keep your current job so that your livelihood and that of your family does not depend on immediate success. Your current job will provide financial support during the rough and tough initial time so that you can evaluate your new business. Business world is a tough world and is difficult to learn it overnight.
-Work in your own house
-Remember that most of your investment will be your time and your ideas to start small and gradually learn and fix the mistakes you are going to commit.
4- Which advice would you provide a friend that wants to start a retail shop?
Assume that one friend of yours wants to start a business (a retail shop) and asked for your advice I think that your suggestion would be: look around your or other cities to see shops that seem to be successful business and that also seem to be growing fast. The main rationale is that if a shop is successful for someone most likely will also be good for your friend. Instead, if your friend wants to start an odd business I think you would advise him that his chances are very small.
5- How to find the right product?
Follow your hobbies to start your business. Use your knowledge or your personal interest to make money. Many entrepreneurs started their companies manufacturing or selling products that were their end of week hobbies like photography equipment, fishing tackle, diving equipment, cars, paintings, plants etc.