We want to introduce you to Ernie DelleDonne, founder of Xperience. Ernie isn’t from the web design industry but from the business world. Ernie has had a successful career in business as a senior executive. Today, Ernie shares his knowledge as a business consultant and workshop/training provider. Although this article is not web design or development focused, the principals here are universal to all businesses. If you are thinking of embarking on a freelancing career we think you’ll find this information will help you to be better prepared.
1. Why do most new businesses fail?
About 90% of all new businesses fail within a relatively short time for many reasons. Some of the primary ones include:
- Not enough start up or working working capital
- Failure to prepare and execute a solid business plan
- Owner does not have the skill set required
- Often pay more attention to what they know versus what they need
- Not recognizing the need for change and not adapting quickly to market conditions
- Not practicing “continual” management
- Taking advice from the wrong people
2. What skill set is required as an owner or manager of a new business?
Most businesses require someone with broad skills at least until they can afford to hire skilled employees. Skills required for most businesses include sales, marketing, financial, logistics, operations. management and the “courage” to learn what you don’t know.
3. How long should it take to become profitable?
Historically most new company’s planned on being profitable after 1 year. In today’s competitive markets and with financial institutions in crisis the need for profitability or at least break even is more like 6-8 months. This increases the need for adequate capital and a solid business plan.
4. What tips do you have for new businesses?
Plan for the worst……..and hope for the best?
Build a solid foundation for your business from the very beginning. This will provide the platform to grow your business from. It is easier and more cost effective to build it right the first time and not have to rebuild down the road. Employ a plan that allows practical and affordable growth. Don’t let the market you are in dictate growth…..you should only grow when you can afford to do so. The most important thing you can do is practice “Continual Management. That simply means never take your eye off the ball, never get complacent especially when business is good and always
run your company as lean and mean as possible.
5. What is the main reason why businesses lose customers?
One word….INCONSISTENCY!
Customers hate not knowing what to expect, when to expect it, how much its going to cost, what it will look like or taste like. It drives customers crazy….think about your favorite pizza place….you know what it will look like, taste like and how long it will take to deliver it. If it was sometimes square instead of round, cold instead of hot or was sometimes delivered in 15 minutes and other times 60 minutes you would quickly find a new more consistent and dependable pizza place. Your business must deliver consistent service and consistent quality to retain customers. Surveys have shown that 49% of lost customers leave for this reason.
If you have any business questions you would like to have answered,
feel free to click here and “Ask Ernie”. Whether you are in a management position, self-employed, starting fresh, planning for your exit, Ernie can share his incite and assist you in making the right changes and decisions.
