If you are like many entrepreneurs, you may be searching for or experimenting with new business ventures – the opportunities are vast and exciting. Here is a cautionary tale, however, about a family entertainment business which discovered some of the pitfalls if you are not properly prepared.
The owners (Mom and Dad) had a well-established community entertainment business with a good clientele. The owners’ children (employees and owners-in-training) agreed that to reach a younger marketing segment they wanted to introduce a popular new entertainment option into the business. Mom and Dad got sold on the venture (because it is trending all over the country) and bought into the idea. With all in place, the new option opened to great success. Employees were hired to help run the new venture and the owners began thinking about expanding the business even further.
While exciting and rewarding at the start, the owners-in-training opened the new venture without a marketing plan or outline of how and when new employees would be trained to take on the day-to-day management of the system. After the initial interest wore off, the owners and owners-in-training were struggling to bring in new customers and dealing with increasingly difficult customer relationship issues. Between them, the owners and children had failed to sit down and plan out who would be responsible for which phase of the new operation. Would Mom and Dad be trained to operate the venture when the children were away or managing other parts of the business? If something broke, would the new hires know who to contact? Besides brief job descriptions and a short overview of how this venture would work, everyone seemed to think that once it was established, the new venture would flow along smoothly while owners and employees figured out the next steps.
Without adequate training and oversight, the new hires felt overwhelmed when problems cropped up and customers complained; many were unhappy in their jobs and eventually quit. And, without a good marketing plan, the owners relied on limited efforts to brand the venture and build a new target audience.
Unfortunately, this happens in many businesses, big and small. An exciting trend becomes part of an operation without much pre-planning or marketing research. Good idea or not, trying to solve issues after the fact creates stressful work and family relationships. And while you are dealing with those issues, other parts of the business can be neglected.
If you decide to introduce a new operational phase into your business, take the time to truly evaluate what the implications will be. Will you need to hire additional employees? Who will train them? Who will be responsible for the management of the new system? Does the venture fit into the key audiences you already attract, or how will you develop new market segments? What profit and loss estimates are comfortable to assume? Is everyone on board with the plan and aware of what their responsibilities will be?
This practical approach doesn’t mean trendy “pop-up” ventures can’t be successful, but points to the necessity of having good business planning and insight in place. When you know your strengths and abilities and what your business can handle, taking on new ventures is less risky and more rewarding.
The above information is provided for educational purposes and should not be substituted for professional business and legal counseling.