The Tribune

When I speak to business professionals employed in both the public and private sectors, it always amazes me how many have entrepreneurial aspirations and are looking forward to owning their own business - before and after retirement.

Most do not realise their dreams, given the immense risks involved in assuming responsibility for enterprise as a sole proprietor. But there are those who take the plunge and make significant investments in some entrepreneurial endeavour, hoping for the projected returns.

Perhaps it is the statistics highlighting the high failure rate that frighten, and sometimes paralyse, many about to enter the business world. Many enter without a fighting chance of survival, then succumb to the pressures and forces working against the struggling Bahamian entrepreneur and small and medium-sized enterprise (SME).

Our focus today addresses the common mistakes that Bahamian entrepreneurs make, in an attempt to increase the success rate and sustainability of fledgling businesses.

1. Being product-driven, not customer-driven

Everyone believes their products and services to be the best, and in their own eyes - and probably those of their nearest and dearest - they are right.

But, in a wider market, this notion quickly dissipates. Truth is, after first taste of even an incredible product or service, it is the level of service that keeps customers coming back.

Companies such as Swanks Pizza, Chicken Unlimited and many others, despite having an amazing product, could not withstand the pressures of a demanding marketplace. A strategy that includes a focus on the customer is wise for persons going into business for the first time.

1. Spending money before you make it

This strange Bahamian phenomenon baffles accountants and business consultants, who cannot understand how and why fledgling businesses are so free in spending funds, and often fail to separate personal finances from the company’s.

It may not be wise to make significant investments in fixed assets that are intended to complement the business. Never mind that the store down the road has a shiny new delivery truck or a beautiful store front. They may have the financial backing you do not. The new business person must become quite frugal and conservative with their spending habits if they are to survive in a consumer economy.

1. Not having a clear focus

The adage that the ;jack of all trades is the master of none’ plays out often in the world of entrepreneurship.

The era when the shop in Coconut Grove had a little of everything is long gone. Business persons today must find their niche and work on securing a competitive advantage in the delivery of a few line items if they are to survive.

1. Performing inadequate market research

Research requires reading, and this perhaps is our first great hurdle. Once we pass this obstacle, there is the challenge of access to quantitative and qualitative data that supports the ‘do’s and dont’s’ of business in our country.

Where is the body of research regarding 10 (or five, for that matter) authentically Bahamian, successful companies that have survived 50 consecutive years? This reality should not excuse persons with entrepreneurial thoughts from conducting a basic - but thorough - analysis of potential customers, competitors, the market or sector they are entering, and the economic climate in which they are to operate.

This information gives the entrepreneur the knowledge and skills to grow and develop the business, ensuring its sustainability.

1. Failing to strategically plan the business

Budgeting, planning, organising and structuring are all terms that must be familiar to the new business person.

Here is a brief checklist of plans that must be reviewed and professionally done, if the business is to have a fighting chance for survival:

• Goals and objectives

• Vision, mission and value statements

• Financial strategy

• Marketing strategy

• Training plan

• Employee sourcing and recruitment plan

• Customer, market and competitor analysis

• Operational and management plan

Far too many neglect to take this groundwork seriously, thinking such a level of intense preparation is only needed for big business. The truth is, smaller businesses are even more vulnerable and require that much more focus and attention in their infancy. A solid foundation of planning, and avoiding the pitfalls outlined in this article, will provide a greater chance of surviving this sometimes treacherous economic climate.

• NB: Ian R. Ferguson is a talent management and organisational development consultant, having completed graduate studies with regional and international universities.

He has served organsations, both locally and globally, providing relevant solutions to their business growth and development issues. He may be contacted at tcconsultants@coralwave.com