We have heard these sayings often. It is said that every minute there’s a sucker born and all that glitters are not gold. Wise men also said that fools and their money are soon parted. They simply warned us that not all opportunities in the business world are acceptable. Not all of them are likely to succeed. Some ideas are simply too outdated and the market is already saturated, but we are unable to provide something that’s unique. Also, there are so many con-artists who have the sole purpose to deceive us into making wrong financial commitments. They may have no problems trying to rob us blind.
In reality, these failures are caused by improper due diligence on our business ideas and operations. There could be entities or franchises that we plan to purchase, but they may not represent sound business concepts. This is a critical part where many businesses could start to fail. We should be able to look for mistakes at the very beginning. This is the reason why due-diligence is particularly useful for start-ups and also on-going companies.
In fact, successful, large business regularly performs due-diligence on any internal process, such as strategic planning, financial planning, business process improvements, and system reviews.
Many businesspeople also contemplate acquisitions and expansion thrusts that require repeated analysis and considerations. Start-ups obviously need to perform this before they invest a significant amount of fund. We shouldn’t take pieces of advice from those who have specific vested interests that could harm us in the long run. As an example, marketers could encourage us to consider buying a franchise.
In this situation, we shouldn’t rely solely on pieces of advice given by the vendors, regardless of their persuasive stories and polished websites. They may tell us great opportunities and money that we could make. We should always look for independent bits of advice and we need to do our homework before we invest. Many people start their business based on specific personal passions. This is clearly a great positive factor for success and a huge passion can drive us to overcome challenges and passions.
However, it may carry the risk of planning business decisions with our heart and emotions, instead of our head. Sometimes, we are just too close to the completion of a project that it’s hard to become more objective. When we are about to participate in a large-scale project, we could become emotionally committed.
This should be the right time to get opinions for others, especially if we have mentors, advisors and experienced business coaches. These professionals may provide us with some brutal truths, but it is still a compassionate way of preventing us to get into a disastrous mistake. Finally, we shouldn’t be taken by people who regularly pressure us into investing into any of those limited space available or once in a lifetime opportunity. We should take a step back anytime someone says that to us. We should take a good hard look and see whether we are missing something.