Advice for entrepreneurs quoted in Oct 18, 2010 Toronto Star Article "Dodging Danger in Tough Times" by Madhavia Acharya-Tom Yew

1. For many businesses, being a small company is just a stage in the progression from a start-up
company to thriving enterprise with many employees, and products exported to customers around
the world.
To achieve their full potential small companies need to get many things right, but they also need to
avoid these 5 critical mistakes.
1) Not having long term Goals, and Plans to get there
2) Neglecting to carefully manage cash
3) Making assumptions about customers
4) Not seeking external advice
5) Not Networking to seek new opportunities
5 Top Mistakes Small Companies Make
Paul Rivett, Director Client Services, ISCM, (905) 248-2722 1
For more info see www.iscm.ca
To access this service click on
Register as a Client

2. Mistake #1 – Not having long term Goals, and Plans to get there
Building a business is an ongoing sequence of decisions, actions, and results.
Without clear goals and plans, decisions are unguided and the results are chaotic.
Goals drive plans. Plans drive decisions
Each decision creates results that move the company closer to its goals
ADVICE:
Take the time to clarify your goals for the business
• short term (1 year) and long term (3-5 year).
Break-down the goals into specific plans
For example, if one goal is to double sales in one year. Plans
need to include the number of prospecting calls per day, and
the number of leads required to make this many calls.
Synergy comes from finding the hidden connections within your plans.
2

3. Mistake #2 – Neglecting to carefully manage cash
Cash fuels the actions of the business, and must be carefully managed to ensure there
is sufficient to carry out the plans.
The quality of plans is critical to avoid wasting cash by starting projects that cannot be
completed.
Just growing a business requires cash.
• even the best managed companies may wait several months to receive cash
from customers, after paying all the costs to produce and ship their product.
• underfinanced growth companies can go bankrupt this way.
ADVICE:
Plan out your cash in-flow and out-flows
Check the plans before making large cash commitments to projects and customers.
3
For example: before accepting a large production order, make sure there is
sufficient cash reserve to cover all the costs until customer payment is received.
Cash is King. Get the most value from every expenditure.

4. Mistake #3 – Making assumptions about customers
Your corporate customers are all under tremendous pressure to reduce costs
• They spend considerable time researching and comparing alternatives for key
purchases.
• They compare based on value
• from their perspective
• basic functional features and price
• special features that they value like reliability and environmental factors
Your competitive advantage can change quickly
• as your competitors innovate to increase their value to your customers
ADVICE:
Dialog with clients regularly - not just for new opportunities to sell something.
Monitor your competitors and learn what they are saying to your customers.
Monitor customer and competitor trends in the larger markets – not just your niche.
4

5. Mistake #4 – Not seeking external advice
Small business owners rely on themselves and a few key managers to set plans for their
company.
Yet for most businesses, the marketplace, the technology, the competition, and the
financial markets are too complex and dynamic for this management team to keep current.
So the company gets caught off-guard when a gradual trend suddenly becomes a major
business issue, or a new competitor suddenly takes customers by exploiting changes in
technology, legislation, currency can suddenly impact the business.
ADVICE:
Establish a Board of Advisors, and bring them together to discuss industry trends and
growth opportunities.
Many successful entrepreneurs go one step further, and enlist their advisors to help
motivate them to set and achieve aggressive targets for their business
5

6. Mistake #5 – Not Networking to seek new opportunities
New opportunities are created every day as companies seek to address the challenges in
our businesses, society, and environment by applying technology, fresh ideas, and
enthusiastic innovations.
There is abundant access to knowledge and information that is relevant to your business.
Most companies miss out, because they are not networking beyond their company and
immediate base of suppliers and customers.
So we frequently hear business people say "I wish I had known about that (program,
solution, problem, opportunity) 3 years ago".
ADVICE:
Join a local business association - and attend their events.
Learn about other organizations, government programs, potential suppliers, collaborators
and partners.
6
Get connected and learn to leverage your connections.

7. Need help avoiding these mistakes?
We just touched on advice for avoiding and addressing these mistakes.
ISCM is a not-for-profit organization that can provide you with advice (at no fee to
you) from experienced entrepreneurs and business leaders, to help you identify
your next stage of growth and devise plans to get there while minimizing these
critical mistakes. Please see links below for more info.
Check-out ISCM for:
• Advice on your long term goals and plans
• Advice on cash management and financial issues
• Information on markets, competition, and trends
• Advice on building boards of advisors
• Information and networking events
• And much more
7
For more info see www.iscm.ca
To access this service click on
Register as a Client
Paul Rivett, Director Client Services, ISCM, (905) 248-2722