4 common mistakes made when starting your own business

With the soles of shoes worn thin and online job applications seemingly dropping into a vortex, job seekers are more frequently relying on their entrepreneural spirit.

Whether it’s side a business to supplement an income or a new venture sought after one too many “Thanks, but no thanks” letters, the idea of launching out on your own is striking a chord. It’s what prompted Gail Margolies Reid of Alpharetta to author “The Complete Idiot’s Guide To Low-Cost Startups.”

From personal trainers to obedience training, closet design to child care, Reid explains the risks, start-up costs, special requirements, equipment needs and more to get a business off the ground for $1,000 or less.

“These businesses are targeted,” said Reid, a featured speaker on Sunday during the AJC Decatur Book Festival. “It’s [for] someone who has lost a job and their unemployment has run out. For different reasons, they’ve become desperate and they have to hit the ground running and get a cash flow. This empowers people to have a basis to make a sound business plan.”

But as Reid, a certified public accountant, points out, not all ambition reaps financial rewards. There are potholes and misguided ideas that can ruin things for even the most determined. There are a few common mistakes new business owners make along the way, Reid said.

1. Assuming your perception of a need really exists.

“You know there is a gap in the market, but is there a market in the gap?” she said. “Just because you think it’s something everyone wants, doesn’t mean that they do.”

2. Coming up with ideas for the wealthy.

“You need a customer base,” Reid said. Too often, entrepreneurs try to sell high-priced products because they think they’ll make more money than if they sold something that cost $9.99. But there is a bigger market, especially these days, for bargain shoppers.

3. Not connecting with your connections

It’s one thing to network, glad-handing strangers at various functions. But for a quicker start, Reid urges people not to neglect the folks they already know — even if they aren’t obvious clients.

“Your connections are an overlooked database,” she said. “Then, get more purposeful about meeting people.”

4. Not talking to others in the business

Reid also says its important to reach out to other people already working in the business you’re interested in. “You’ll find a lot of times they are very generous with information about what’s worked, and about the mistakes they’ve made,” she said.

Reid will speak Sunday from 2:30-3:15 p.m. at the Decatur Conference Center Auditorium, 130 Clairemont Ave. Admission is free.

Do you have a question for Gail Margolies Reid? Post it here

Question: Have you started your own business since the start of the recession? What have you learned? What have been your successes and failures? What questions do you have for Gail Margolies Reid?

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5 comments Add your comment

Lee

August 31st, 2010
11:11 am

Yes, starting a business in a recession is a prime opportunity. You can get build out done at a fraction of what it would be in a prospering economy. Have your vendors bid on your business.

You can also get better labor and workers for your business due to many people being out of a job. This helps drive down your employee costs.

Also if your business can survive in a down economy, you will thrive when the market comes back.

MG

August 31st, 2010
11:40 am

Starting a business is a great idea. Although it can be a challenge, it is well worth your effort. I started my business so that I can not only take care of myself but also my loved ones, my school, my interests, etc.
MG

Gail Margolies Reid

September 1st, 2010
7:44 am

Lee’s comment about thriving when the economy comes back is a very valid point. Competition diminishes in bad times, so those who are still standing when things start to improve are in a great position to dominate the market. Thanks for contributing.

slow is the new busy

September 1st, 2010
9:25 am

We own a 2-year-old manufacturing company, and we were able to buy equipment for $2-3k that is worth $10k used and maybe $20k new (right-place-right-time on auction sites). It helped that we’ve always lived a thrifty lifestyle so we had a cash position to make these purchases. Also, because landlords are more desperate, we can rent in a great location where it would have been impossible 2+ years ago.

The only downside is knowing that each of our “finds” represents somebody else’s shattered dreams, many times their entire livelihoods invested in their business. You can hear the sadness in their voices.

Gail Margolies Reid

September 1st, 2010
4:26 pm

Dear Slow: There is not much sadder than seeing someone walk away from a failed business. Sometimes people learn the valuable lessons and get back in the game. Often the failure becomes an important life lesson that has hidden benefits. Hopefully their mistakes will help steer you toward continued success. It’s good to hear a story about someone benefiting from the down economy. Starting with used equipment is a great way to keep your startup low-cost. Thanks so much for sharing.