Seven deadly sins of entrepreneurship
Common obstacles for entrepreneurs and where to find help.
Entrepreneurs face challenges every step of the way when opening a new business; even seasoned business owners have issues. By using resources such as Michigan State University Extension, local economic development groups and certified business counselors, aspiring entrepreneurs increase their likelihood of success.
Michigan State University Extension (MSUE) offers a presence in every Michigan County where Extension faculty and staff members can provide tools to help businesses. MSUE also partners with local economic development groups such as Northern Lakes Economic Alliance (NLEA) to assist entrepreneurs and growth stage companies to work through their challenges.
With access to comprehensive resources, clients are guided through the complex process of starting a business and are coached on strategies to overcome challenges such as:
- Show me the money - having sufficient cash on hand: According to Bloomberg, “8 out of 10 entrepreneurs who start businesses fail within the first 18 months, and a whopping 80% crash and burn.” The reason is simple; too little cash on hand. Plan to have three times what is needed to protect you from downturns.
- Understanding debt: Debt can be good if used to fund expansion and improve the bottom line. In your early stages, business debt is often personal debt, as pre-approved lines of credit secured by personal assets may be necessary guarantee a loan if, and when you need it. Therefore, it is important to know how deeply in debt you can afford to go.
- Securing health and disability coverage: The law now requires you to have health insurance to avoid penalty at tax time. If you currently work for an entity that offers health coverage, you may be eligible to keep and pay your premium for up to 18 months while you shop for a different plan. Disability Insurance on the other hand, is generally non-transferable. As difficult as it may be, it is wise to plan for the unlikely possibility that illness or injury might prevent you from working.
- Little fish in a big pond: To succeed, you'll need to compete with larger companies that have experience and resources. Downplay your size and focus instead on what you can offer as a smaller firm like greater expertise, attention to detail, customer service, and speed of product or service delivery.
- Time to be a techie: Staying up to date and using the latest technology including laptops, tablets, and smartphones can offer you and your employees the edge in responding to customer needs, as well as keeping current with your market and competition. Social Media is also playing a big role in helping companies grow and expand.
- SELL SELL SELL: Your attention should be focused on sales and revenues. You won't grow if you don't sell your service or product, so plan to dedicate yourself or one employee to sales.
- Staying focused: A written business plan that includes specific steps to achieve desired results will help you stay on course and become your most important sales and marketing tool to potential lenders, investors, and/or business partners. Plan to plan!
There are many agencies and resources in Michigan that can help entrepreneurs address these and other business planning challenges. Begin by contacting your local Michigan State University Extension office, local economic development group or local Chamber of Commerce.
“Michigan State University Extension has had a unique relationship with the regional economic development organization Northern Lakes Economic Alliance (NLEA) for more than 20 years. Recognizing the strength of combining resources, this partnership focuses on economic development, entrepreneurship growth and community infrastructure throughout a four-county region in the northwest Lower Peninsula, specifically Antrim, Charlevoix, Cheboygan and Emmet counties. As a result, the NLEA utilizes resources offered through MSU Extension as it provides leadership to state-wide programs sponsored by MSU Extension.”