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  1. #1
    Join Date
    Jul 2003
    Location
    Goleta, CA
    Posts
    5,550

    Post Common Mistakes New Businesses Make

    Just because you have a plan doesn't mean it will work. All of these are common but sometimes we all need a reminder to steer our business ship away from the rocky coast.

    *Adapted and taken from Writing Business Plans That Get Results

    Industry:

    The section will discuss the larger business environment and trends. By going over
    the industry, you can also show how your business will address it.

    Common Mistakes:

    1.Failing to demonstrate a well-rounded knowledge of the industry
    2.Appearing to be a “fly-by-night” operation
    3.Appearance of a lack of direction.

    Your Product/Service:

    The section will discuss the “what” of your business.

    Common Mistake:

    1.Describing the product/service too technically, too broadly, or too ambiguously
    2.Failing to complete research on how to protect from liability or competition.
    3.Identifying too much red tape/uncertainties from regulatory agencies.
    4.Including weak future development plans

    Market Analysis:

    The section will demonstrate that you understand the market, that you can penetrate it, and that there is a demand for your product/service.

    common mistakes:

    1.Believing that the size of the market base is equally distributed
    2.Failing to prove that your target market represents the major portion of the demand for your product/service
    3.Making unrealistic market share projections
    4.Failing to demonstrate a clear understanding of the product/service and the market
    5.Failing to include an accurate estimate of the profitability of each service transaction.
    6.Not properly assessing the total market potential or changes
    7.Presenting the facts to make your market appear to serve your business, rather than your business serving the market.

    Competitive Analysis

    (some people choose to include this in "Market Analysis," but
    that is your choice): The section will show that you are fully aware of the competitive forces at work in your marketplace. It will explain your strengths over the competition, as well as how you will counteract their advantages and overcome (or compensate for) your potential weaknesses.

    Common Mistakes:

    1.Not identifying known major competitors
    2.Underestimating competitive strength and potential
    3.Failing to demonstrate what makes you better
    4.Having no strategy for counteracting current (or emerging) competition
    5.Assuming you have no competition
    6.Failing to show an awareness of competitor’s plans in the market and their business
    cycles.

    Financials:

    This section will illustrate the financial needs and projections. It will describe the
    type of financing desired as we as the amount, payback terms, and potential return on investments.

    Common Mistakes:

    1. Making unrealistic sales and profits projections.
    2. Failing to make reasonable assumptions.
    3. Planning to spend too much money on “fringes”
    4. Failing to project the downside if sales don’t go as expected.
    5. Proposing a return lower than industry norms

    The Business:

    This section will illustrate who exactly will run the business, and how.
    Principals, and their roles, will be clearly indicated as well as their methods for effectively running the company.

    Common Mistakes:

    1. Failure to truly discuss principals’ strengths
    2. “Over hyping” principals
    3. Not offering concrete means for developing a positive work environment
    4. Failure to show a true chain of command
    5. Including non-essential staff as necessities
    Last edited by writespeak; 12-17-2006 at 03:25 AM. Reason: To subscribe to this thread

  2. #2
    Join Date
    Feb 2006
    Location
    Swellyville
    Posts
    2,340
    Very nice indeed. This can not only help new business owners but existing ones aswell. Very nice post here. All point mentioned are very valid. Another one for industry (especially in web hosting) would be lack of innovation. IMHO innovation is a must for any web hosting. With the constent raise of new "hosts" popping up every single day, innovation is most certainly key! Furthermore, the web hosting industry in general is confusing to most new comers. Alot of consumers dealing with web hosting that are new do not know exactly what to look for, what diskspace (nevermind bandwidth) even means. We as hosting providers need to focus on making it easier for the customer to better understand.

    Very nice post!
    Quote Originally Posted by pixelized
    Just because you have a plan doesn't mean it will work. All of
    these are common but sometimes we all need a reminder to steer our business ship away from the rocky coast.

    *Adapted and taken from Writing Business Plans That Get Results

    Industry:

    The section will discuss the larger business environment and trends. By going over
    the industry, you can also show how your business will address it.

    Common Mistakes:

    1.Failing to demonstrate a well-rounded knowledge of the industry
    2.Appearing to be a “fly-by-night” operation
    3.Appearance of a lack of direction.

    Your Product/Service:

    The section will discuss the “what” of your business.

    Common Mistake:

    1.Describing the product/service too technically, too broadly, or too ambiguously
    2.Failing to complete research on how to protect from liability or competition.
    3.Identifying too much red tape/uncertainties from regulatory agencies.
    4.Including weak future development plans

    Market Analysis:

    The section will demonstrate that you understand the market, that you can penetrate it, and that there is a demand for your product/service.

    common mistakes:

    1.Believing that the size of the market base is equally distributed
    2.Failing to prove that your target market represents the major portion of the demand for your product/service
    3.Making unrealistic market share projections
    4.Failing to demonstrate a clear understanding of the product/service and the market
    5.Failing to include an accurate estimate of the profitability of each service transaction.
    6.Not properly assessing the total market potential or changes
    7.Presenting the facts to make your market appear to serve your business, rather than your business serving the market.

    Competitive Analysis

    (some people choose to include this in "Market Analysis," but
    that is your choice): The section will show that you are fully aware of the competitive forces at work in your marketplace. It will explain your strengths over the competition, as well as how you will counteract their advantages and overcome (or compensate for) your potential weaknesses.

    Common Mistakes:

    1.Not identifying known major competitors
    2.Underestimating competitive strength and potential
    3.Failing to demonstrate what makes you better
    4.Having no strategy for counteracting current (or emerging) competition
    5.Assuming you have no competition
    6.Failing to show an awareness of competitor’s plans in the market and their business
    cycles.

    Financials:

    This section will illustrate the financial needs and projections. It will describe the
    type of financing desired as we as the amount, payback terms, and potential return on investments.

    Common Mistakes:

    1. Making unrealistic sales and profits projections.
    2. Failing to make reasonable assumptions.
    3. Planning to spend too much money on “fringes”
    4. Failing to project the downside if sales don’t go as expected.
    5. Proposing a return lower than industry norms

    The Business:

    This section will illustrate who exactly will run the business, and how.
    Principals, and their roles, will be clearly indicated as well as their methods for effectively running the company.

    Common Mistakes:

    1. Failure to truly discuss principals’ strengths
    2. “Over hyping” principals
    3. Not offering concrete means for developing a positive work environment
    4. Failure to show a true chain of command
    5. Including non-essential staff as necessities
    <<< Please see Forum Guidelines for signature setup. >>>

  3. #3
    Join Date
    Jun 2004
    Location
    North of some border
    Posts
    5,559
    Moved to Running a Web Hosting Business Tutorials.

    Looks good. Thanks for posting it.

    Lois
    Do you have a WHT question or concern? Please open a helpdesk ticket.

    "Do what you can, where you are, with what you have." – Theodore Roosevelt

  4. #4
    very informative post specially for someone like me who is looking to start hosting buisness
    AKDesigner
    We Design Your Dreams
    ---------------------

  5. #5
    Join Date
    Jan 2007
    Location
    USA
    Posts
    45
    Might I add: You don't want to get too big too quickly. Know your limits. Especially if you're just wanting to host a handful of people. =)

  6. #6
    I would suggest that as with starting any business NOT checking with a lawyer at some point in the process could prove to be an incredibly bad idea.

    Good Luck.

  7. #7
    Join Date
    Aug 2006
    Location
    Bradford, UK
    Posts
    11
    Interesting read, keep it up.
    Regards,
    Dean Hannah

    COOLBLUENET - Shared Web Hosting

  8. #8
    awesome tutorial, thanks!
    Soon launching new web host!
    Reseller | VPS | Dedicated servers

  9. #9
    Join Date
    Mar 2005
    Location
    Houston, TX
    Posts
    268
    Very nice. This is a good read for new and existing hosts.
    ░▒▓ Bidding Farewell to Web Hosting Lobby
    ░▒▓
    ░▒▓
    ░▒▓

  10. #10
    Hi,

    Thanks for the very comprehensive leicopter views of the common pitfalls. A great asset to newbie and established hosters alike.

    Cheers !!

  11. #11
    thanks a lot for the tips

  12. #12
    Thanks for this tut, valuable reading!

  13. #13
    Join Date
    Jul 2005
    Location
    A Gigopolis In The Making
    Posts
    316
    very informative and useful! thanks
    NoFrillsLogo.com - Never pay more for your logo!

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  14. #14

    Lightbulb

    Mmmmmmm really nice and very usefull information for anyone planing to start a hosting business or even for anyone whose already in the business.
    Goviphosting.com - The best VIP hosting experience
    For Speed, Performance, Reliability with Dedicated Support
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  15. #15
    Join Date
    Aug 2002
    Location
    Bharat
    Posts
    4,686
    Good information, and if clubbed with what Serverpedia said innovation makes it great.

    I must take a print and stick it on the pinup board in front of my desk.
    Vinsar.Net - Quality Web Hosting at Economical Price on USA & European Servers
    Offering domains, shared, reseller & VPS hosting.
    Reliable Domain Reseller Account Resell Domains with Confidence

  16. #16
    Amanah Tech Guest
    Looks good. Do you have any suggestions about promotions for starting businesses?

  17. #17
    Join Date
    Aug 2002
    Location
    Bharat
    Posts
    4,686
    Amanah

    Starting new business:

    If you have lot of funds, then google is your friend do some adwords, may be you can do some limited time promotional offers in places like WHT.

    If don't have enough funds then best is to target local clients, you can get many of them with little personal effort.
    Vinsar.Net - Quality Web Hosting at Economical Price on USA & European Servers
    Offering domains, shared, reseller & VPS hosting.
    Reliable Domain Reseller Account Resell Domains with Confidence

  18. #18
    Amanah Tech Guest
    Thank you,

    What kind of companies do you think is the target market for hosting providers?

  19. #19
    Join Date
    Aug 2002
    Location
    Bharat
    Posts
    4,686
    To start with, local web designers, IT solution providers/consultant, any one else who want to host a website.
    Vinsar.Net - Quality Web Hosting at Economical Price on USA & European Servers
    Offering domains, shared, reseller & VPS hosting.
    Reliable Domain Reseller Account Resell Domains with Confidence

  20. #20
    Amanah Tech Guest
    Quote Originally Posted by vinsar View Post
    To start with, local web designers, IT solution providers/consultant, any one else who want to host a website.
    Makes sense, how about more demanding users?

  21. #21
    Join Date
    Aug 2002
    Location
    Bharat
    Posts
    4,686
    If you know them and if you can handle them its fine.
    Vinsar.Net - Quality Web Hosting at Economical Price on USA & European Servers
    Offering domains, shared, reseller & VPS hosting.
    Reliable Domain Reseller Account Resell Domains with Confidence

  22. #22
    Great and wise advice
    █ Specializing in Shared & Reseller Hosting
    █ Reliable, Superior, Blazing Fast

    Genome Hosting Solutions

  23. #23
    Join Date
    Apr 2007
    Posts
    12
    great read cool beans TY for the post

  24. #24
    Join Date
    Jun 2007
    Location
    Lindon, UT
    Posts
    34

    Question Price points?

    You made some great points on things I didn't think about, thanks for the great pointers.
    Last edited by spatical; 06-06-2007 at 07:16 PM. Reason: My orginal post was not relevant here.

  25. #25
    Join Date
    Jun 2007
    Location
    Norman, OK
    Posts
    2
    Good information, thanks a lot!

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