4 assumptions that ruin entrepreneurs

All businesses start on assumptions but the great ones don’t thrive on assumptions. Assumption is the starting point of a business because the promoter usually gets the idea to go into the business on the assumption that there is a need. However, while many business promoters stay at that level and build their businesses on hunches and feelings dictated by their assumptions, very few business promoters go beyond that level to conduct a thorough survey to see if there is indeed a need and how a new business can effectively meet the business at a competitive price. They talk to people and study the trend before putting their resources into the venture. So, while the one who planted his business wholly on assumption and refused to stretch himself a little will soon run into a problem beyond his capacity to handle, the one who was less presumptuous will have a good run and build a lasting business.

Another assumption that ruins a business is to think that a business exists to make profits. Many an aspiring entrepreneur is motivated by the desire to make money from his business. While it is true that a business cannot continue in existence without being profitable, to equate the essence of a business to profitability is to put the cart before the horse, a precursor of frustration. A business’ raison d’etre is to create customers, not to rake in profit. It is when customers are created and kept that a business can really become profitable. The difference between running a business to make profit and running it to create customers is that while the fellow with the first mindset is always looking at the bottom line, the other guy is concerned about satisfying the customer. While the first fellow wants to make profit irrespective of what happens, the other wants to keep his customer at all costs. These determine their actions as well as the result they get.

Many wannabe entrepreneurs operate on the assumption that their cash flow projection is water tight. But that is nothing but illusion grandeur. If there is anything that is sure of failing in a business, it is the cash flow plan because it is hinged on the number of customers generated, selling at the right price and using the right channel. Getting it right on all counts is as easy as a camel passing through the eye of a needle. So, running on the assumption of an infallible cash flow projection is akin to taking a new business on a trip to Golgotha.     

One fundamental feature of humans is the desire for change. The average man gets bored easily, thus his crave for new things is always high.

Unfortunately, however, many entrepreneurs pay little attention to this; they go about with the assumption that the market will always take whatever they offer. This is a very erroneous assumption; the market can choose and pick and it will always choose and pick a product that appears new regardless of its age. That is why the axiom, innovate or die holds true. The entrepreneur that keeps on thriving is the one that keeps on innovating.

• Written by  Sulaimon Olanrewaju

• Source: Punchng.com