Here is a real life lesson that should be a warning to would be business owners in Ireland. Someone I know recently opened up an alternative health centre. They had an idea that they would like to offer Reiki services, and because they had an interest in angel card readings they also decided to open an shop selling Angel products. They rented a two room premises on the first floor of a high street. They spent 2 months fitting out the shop, buying stock and ‘getting everything ready’.

Now 3 months after they began they are starting to panick, everything is set up and they have spent well over €10,000 but there have only been a handful of customers and sales of less than €500. Given that this person gave up a well pad job of over €40,000 per year they are starting to get pretty worried about how to turn things around.

This person has made the classic mistake of thinking that because they have an idea and a premises and stock that they have a business.
They couldn’t be more wrong. What makes a business is customers, and lots of them, and a proven system for getting more customers, looking after the current ones and keeping in touch with them.
What she should have done? If we were to rewind the clock with the benefit of hindsight this is what this person should have done before quitting a well paid job and spending €10,000 of their hard earned savings.

1. Start small on a part time basis. Rather than launching full on with all the overheads of a premises and no initial income I would have recommended that she hang on to her job, taken just one room of premises or maybe even started from a spare room at home. If things started to take off then she could have then tried to cut back on her work and gone part time. People often forget how hard it can be and how long it can take to replace a full time income from a new business. Often it can take entrepreneurs years to get to the stage where the income they take from their business is on a par with that from their previous jobs. Sure sometimes you can get lucky and have a business that takes off like wild fire in the first month but hey you also have a chance of winning the lotto too…
2. Not tried to do too much. Instead of trying to open a shop and provide therapies at the same time I would have held back on the shop and just focused on one core aspect of the business, the therapies. Once that was up and running then by all means add on other additional services.
3. Perfected the marketing. Rather than spending all her savings on stock I would have recommended she invest her money wisely on a proper marketing plan and execution of that plan. It can take a lot of time and resources to identify which is going to be the best way to attract paying customers and better to do this when you have the safety net of a secure income from a job to fall back on rather than when you are down to you last few euro.

The trouble is everyone who ever started a business always presumes it will be a huge success and doesn’t consider
failure. All to often people focus on what I call the ‘fluffy’ aspects of starting a business such as buying a flash computer and making their premises look just right. Don’t get sucked in by having to have a fancy website, stationery and other such things. Instead if you focus on the one thing that matters - getting and holding on to customers - then you will do much better in the long run.