Serial entrepreneur John Osher has developed numerous consumer products, including an electric toothbrush that became America’s best-selling toothbrush in just 15 months. He also started several businesses, most notably Cap Toys, where he built sales to $125 million a year and then sold to Hasbro, Inc. in 1997.
Osher’s most important contribution to American business may not be the companies he’s started and profited handsomely from, but rather the business advice that he’s willing to share. His list “17 Mistakes Start-ups Make” became a Harvard Business School case study. See what you can learn from his entrepreneurial experiences and use it to create your version of the perfect Freelance consulting business.
- FAILING TO ADEQUATELY RESEARCH THE IDEA TO ENSURE IT IS VIABLE
“The most important mistake of all. I say nine out of ten businesses fail because the original concept is not viable. You want to be in business so much that you don’t slow down and take the time to do the up-front research, so the business is doomed before the doors open. You can be very talented, but your business will fail because the concept is flawed.” Go to the library and do your research. Read blogs, journals and newsletters that pertain to the industry you plan to enter, so that you’ll know what’s going on. Develop a credible business model.
- MISCALCULATING MARKET SIZE, TIMING, EASE OF ENTRY AND YOUR POTENTIAL MARKET SHARE
“Most new entrepreneurs get very excited about their concept and don’t look for the truth about how many people will want to buy what they they’re selling.” Take the time to research and understand targeted customers and get to know why they will want to buy from you or hire you. Calculate your potential to penetrate the target market and grow a client list you can live on.
- UNDERESTIMATING FINANCIAL REQUIREMENTS AND TIMING
“Based on inadequate research noted in Mistakes #1 & #2, fledgling entrepreneurs operate from the premise of over-stated market size and their ability to enter it. They then start spending more money than they should on start-up costs, creating costs that require those inflated sales projections to be met, so they run out of money”.
- OVER-PROJECTING SALES VOLUME AND TIMING
“You have already miscalculated the size of the market. Now you over-project your portion of it”. Always another way to run out of money, no?
- UNDER-PROJECTING EXPENSES
“Cost projections are often far too low. Part of the problem is that you’ve projected market share and sales volume that are too high. There are always unknown reasons that come up to make expenses higher than planned”.
- OVER-SPENDING ON AN OFFICE, OFFICE EQUIPMENT AND EMPLOYEES
“Now you’ve got lower sales, higher start-up costs and then you layer on too-high operating costs.” I have seen colleagues maintain fancy offices when they have the ability to run the business from the kitchen table at home. If you can take clients out to a restaurant for meetings, then why pay for office space? You can get a telephone answering service to personally take messages, so it looks like you have a secretary. I’ve done it for a dozen years. Besides, no one answers the telephone these days, especially not in major corporations. When you need another pair of hands to take on a big project, hire in another Freelancer and spread the wealth.
More next week. Thanks for reading,