Entrepreneurs launch a business venture without adequate preparation or research. This can lead to failure and frustration, as well as wasted time and money. To illustrate this point, let me share with you a real-life example that I witnessed. I live in a neighborhood where there are several restaurants offering similar dishes. One day, I noticed a new restaurant that had opened in one of the vacant spaces. It did not seem to have anything unique or different from the existing ones. A few weeks later, I saw the owner packing up his stuff and closing down the place. I approached him and asked him what happened. He told me that he had another branch in a different area and that he had done a market study before opening this one. I was skeptical, so I asked him if he had visited the other restaurants in the neighborhood to see what they were offering and how they were doing. He admitted that he had not and that this was the only restaurant that he had skipped. That was enough for me to realize that he had not done a proper market study at all. I also asked him how much rent he was paying for the space, and he told me a very high figure. I did a quick calculation in my head and told him that he would need to make at least that much every day just to break even, without any profit margin. He agreed with me and said that he was not able to achieve that level of sales, especially with the strong competition around. This is a very important lesson for anyone who wants to start a business venture, especially in a competitive market. You need to do your homework and analyze your competitors thoroughly, both their strengths and weaknesses. This is the best way to gain experience and insight into what works and what doesn’t.
Hope you don’t make the same mistakes.
Read about why you need a business consultant!