By Anthony Kuipers Moscow-Pullman Daily News, Moscow, Idaho
WWR Article Summary (tl;dr) Aziz Makhani, a small business adviser says one of the most common challenges for entrepreneurs is understanding market risk. Simply put, is there enough of a market for a company's product to succeed?
Moscow-Pullman Daily News, Moscow, Idaho
Statistics show that one-third of startup businesses fail within the first four years.
Aziz Makhani, a small business adviser with the Washington Small Business Development Center, understands the risks and pitfalls that come with starting a business, but he doesn't want entrepreneurs to be discouraged.
"Don't be paralyzed by risk," he said.
Makhani hosted a meeting of 20 business owners and community members Wednesday at Columbia Bank in Pullman as part of the Southeast Washington Economic Development Association's monthly Cup O' Joe meeting.
During the meeting, he covered the most common challenges and mistakes -- or "company killers" -- new businesses must overcome.
One of the most common challenges is understanding the market risk. Is there enough of a market for a company's product to succeed?
He said before owners even register their business, they must understand the market need. That includes scouting the competition, he said.
"You should know the competition better than they know themselves," he said.
Other killers include not planning ahead, not having enough cash flow to get started, not pricing the product correctly and not understanding the regulations that may apply to the company.
He said mistakes are inevitable, which is why he recommends hiring people who have business experience, as those who try to go solo for too long have a smaller chance of success.
During the meeting, Makhani opened the floor to the audience so they could talk about the obstacles they faced when running their businesses.
The owners of Phytelligence, Healing Hands Massage, the Seasoned House and Badger Braces were among those who spoke.
The common challenges they discussed were hiring new employees, insuring their business, getting funding and finding office space.
Some who spoke gave up jobs to start their business, while others work a second job to maintain income. Others invested their retirement money into their new business.
Most of them have worked with Markhani and the SBDC to develop their business.
"One of my goals this year is for existing businesses to reach their maximum potential," he told the Daily News after the meeting.
He said the SBDC can help businesses from "womb to tomb," meaning they can ask for advice from the moment they have a business idea.
Makhani said he often warns people that if they want to start a business by 2020, they need to get started now by meeting with business experts, meet with the Chamber of Commerce and mingle with people in the industry.
"If they start today, they should have started two years ago," he said.
He also advises elderly people without business experience against starting a business, especially if it means spending all of their retirement money to get started.
The SBDC helps people businesses of charge, he said. The next Cup O' Joe meeting will be May 2 at Columbia Bank, and it will feature Tony Poston, founder of College Hill Custom Threads.