Over at the popular networking site LinkedIn one fella asked a very thought-provoking question — "What are [the] top three 'sins' of a startup, from your experience, one should avoid?"

Here are some answers, in no particular order:

- Failure to clearly define target customers
- Not understanding your profit and cost drivers
- Not having a clear purpose and vision of the company
- No strategic business plan for success
- Chasing the dollar vs. your passion
- Too much debt starting out
- Knowing the difference between making a mistake and adjusting one's course
- Believing that the best technology will win
- Underestimating the implications of your risks
- Procrastinating
- Failure to hire or retain top talent
- A great accountant

My top sin is not defining your target customer. One should always ask, "Who and why would anyone want my product or service?" before proceeding. Debt control and a detailed strategic plan are important success indicators as well.

What do you think are the top sins when starting a new business? What specific actions can help prevent one from committing them?

Views: 0

Tags: business, development, marketing, new, plan, startups, strategic

Comment

You need to be a member of FohBoh to add comments!

Join FohBoh

Comment by Garrick Arnold on July 29, 2008 at 6:30pm
Great discussion but I've got a mistake that trumps all those other mistakes combined and here it is: Failure on the part of the founder to recognize and compensate for their own weaknesses and blind spots!

For some founders, wether growing concern or startup, an inability to recognize they even HAVE weaknesses means they're undone before they even get started. And I'm not talking about "I'm not good at math" so you hire someone who is ( good idea anyway ). I'm talking about you're not a big picture person but rather a detail person. Then you need someone with big picture Ying to balance out your detail oriented Yang.

There is nothing worse than seeing someone with entrepreneurs disease who can't get out of their own way.
Comment by Roy MacNaughton on July 29, 2008 at 5:47pm
Dear dot org:

Good question!

Each medium has its own pros and cons.

I specialize in showing independent operators how to market their
restaurants without, as I say on my blog, losing their shirt....or pants.

I try to show them how to use leverage with technology (like the Internet, for example) combined with common horse sense and proven-over-time marketing methods that work without costing an arm and leg.

Keep in mind, that "advertising" is NOT MARKETING.

Marketing includes advertising, plus a hundred other things...and more....

Yes people are sick and tired of intrusive and invasive media advertising. That was the best we had for a long time; but the Internet is catching up fast. it is revolutionizing how restaurants are marketed.

If I still owned a restaurant, i would spend next to nothing on what we used to call the 'major media' (television, cable, radio, direct mail etc.) and concentrate on many other ways of communicating my message...ways that are interactive, that do not include talking AT you, instead of WITH you.

Marketing doesn't get ineffective. Advertising does.

However, some media/methods the marketing communicators use certainly do get very old.

When radio came in, the 'experts' said newspapers were dead. When television came along, the pundits said that the days of radio were numbered. Then along came FM radio, audio cassettes, then Betamax and VHS video cassette recorders, CD's, DVD's and then....the Internet and other neat digital wonders. All the pundits were wrong. They always have been.

Media never dies, it just gets used less, worn out and less efficient or effective.

It's like the expression: "have a nice day". All of us know that that is just a cliche; a hackneyed expression that is meaningless. The person uttering this phrase is acting like a robot or automaton. The original sentiments of the expression are now lost due to familiarity and commoditization of thought and action. 'Hollow sentiment, at best.

We know in the restaurant business that if you cease saying "have a nice day" to your guests, and instead say something like: "hey....thanks for stopping by!" or "Hey, thanks for coming by today!" the customer will stop in his tracks, turn around and look at you and openly wonder if you really meant that.

It's new, different, and brimming full of positive meaning.

That is what the new medium the Internet -- and other digital secrets -- will do for any restaurant's marketing. They will spruce it up, make it new again, and cause it too...to be brimming with positive promise...of good things to come.
Comment by restaurantdotorg on July 29, 2008 at 4:01pm
I did see your post yesterday, and I did think of it when I wrote this.

Sometimes I wonder, however, if at some point people start tuning out all the marketing... I once heard that Americans would accept a lower quality of life if 1/3 of all advertising and marketing was cut out from their lives...

At what point does marketing become ineffective?
Comment by Roy MacNaughton on July 29, 2008 at 3:38pm
If you check out my blog post on FohBoh yesterday, you'll see that your first comment: "failure to clearly define target customers" is right up there on the top of the list....as you have it.

If you don't know who to target your offerings to, you will be using a shotgun, trying to target everyone.

You won't stand a chance doing that.

I talked with someone just this morning who has a restaurant owner-customer who told him he had been in the restaurant business for 30 years; and he had never seen it this bad: food costs escalating almost weekly, people using brown bag lunches, scarce labor, gasoline costs, lay offs, foreclosures, you name it.

I have been in this business for slightly more than 40 years; I have never seen such a negative confluence of factors, (all affecting the entire economy), like what we have now either.

None of this bodes well for the food service and restaurant business, especially my passion and primary focus, the independents.

Independent operators don't have a head office corporate marketing department on which to rely. They don't have the time, money, patience and just plain sophisticated 'know how' they need to effectively compete with the chains.

Marketing is their answer.

Actually, it's every one's answer in this mess.

If you can't figure out who to appeal to, what to sell, where, when, why and importantly...HOW to sell...then you might want to look at alternative industries where perhaps you have this marketing expertise.

Otherwise, keep reading ideas, tips, concepts, secrets and "how to" information here at FohBoh.

It's free!

Advertisments

 

DEPARTMENTS

Social Wine Club for Craft Wineries

Smartbrief

The Sip

The Sip: Stay up-to-date on the beer, wine and spirits category with original content from SmartBrief -More

New food offerings helped Starbucks boost sales

Baked goods, breakfast sandwiches and the first price increases in nearly four years helped lead Starbucks to a 7% same-store -More

JOBS & CAREERS

Posting a job or finding a job starts here at FohBoh. Call us about special $50 posting packages to syndicate across all major jobs boards.

National News

Ward Whitworth Named President for On The Border Mexican Grill

On The Border Mexican Grill & Cantina, which was recently acquired by Border Holdings, LLC, an affiliate of Argonne Capital Group, today announced the appointment of Ward Whitworth as President of On The Border.

The Melting Pot Targets Houston and El Paso, Texas for Franchise Expansion

Restaurants, Inc. announced today that it is actively seeking franchisees to expand its presence throughout the Lone Star State, naming El Paso and Houston as target markets for future franchise development.

Encore Restaurants Purchases 8 Existing Five Guys Restaurants, Plans to Develop 45 More

Encore Restaurants, LLC, a subsidiary of Dallas-based Encore Enterprises, Inc., has announced the purchase of eight existing Five Guys Burgers and Fries restaurants across central California including Elk Grove, Fresno, Lodi, Natomas, Roseville, Stockton, Tracy, and West Sacramento.

Takeout Orders to Hotels Jumped 125% in Popularity in Last Three Years

For many Americans, hotel room service is considered a travel luxury; however, data from PFK Hospitality Research1 suggests that room service revenues fell 9.5 percent from 2007 to 2012, with some hotels shuttering unprofitable operations altogether.

National Restaurant Association Praises House and Senate Commerce Committee Passage of Travel Promotion Act

Yesterday the National Restaurant Association (NRA) praised the House passage and Senate Commerce Committee markup of the Travel Promotion, Enhancement and Modernization Act of 2014. The bipartisan legislation reauthorizes Brand USA, the nation’s first global marketing campaign, to promote the United States as a destination for international travelers.

CROWD FUNDING

If you are looking for capital to start or grow your restaurant, create the next 501c3, develop and launch the next app for the restaurant industry,or want to help your peers in some meaningful way, we want to know about it.

TED TALKS VIDEO

TED: Ze Frank: Are you human? - Ze Frank (2014)

Have you ever wondered: Am I a human being? Ze Frank suggests a series of simple questions that will determine this. Please relax and follow the prompts. Let's begin …

TED: Heather Barnett: What humans can learn from semi-intelligent slime - Heather Barnett (2014)

Inspired by biological design and self-organizing systems, artist Heather Barnett co-creates with physarum polycephalum, a eukaryotic microorganism that lives in cool, moist areas. What can people learn from the semi-intelligent slime mold? Watch this talk to find out.

TED: Shih Chieh Huang: Sculptures that’d be at home in the deep sea - Shih Chieh Huang (2014)

When he was young, artist Shih Chieh Huang loved taking toys apart and perusing the aisles of night markets in Taiwan for unexpected objects. Today, this TED Fellow creates madcap sculptures that seem to have a life of their own—with eyes that blink, tentacles that unfurl and parts that light up like bioluminescent sea creatures.

TED: Nikolai Begg: A tool to fix one of the most dangerous moments in surgery - Nikolai Begg (2013)

Surgeons are required every day to puncture human skin before procedures — with the risk of damaging what's on the other side. In a fascinating talk, find out how mechanical engineer Nikolai Begg is using physics to update an important medical device, called the trocar, and improve one of the most dangerous moments in many common surgeries.

© 2014   Created by FohBoh.

Badges  |  Report an Issue  |  Terms of Service