The Top Income Generating Mistake New Business Owners Make

Are you looking for the next Pet Rock, Furby or Red Bull? Have an idea for the next new thing you know will make you a millionaire?

Hold on there. Before you throw your life savings into that "new idea", you may want to spend some time with the tried and true.

Starting a new business with a new idea may sound exciting, but you better have some deep pockets for your start up budget. You also better plan on working twice as hard to get income in the door.

Think about it. Your business is new. Your product is new. You not only have to convince people they should buy from you...you have to convince them they need your product in the first place!

The number one thing you need to make your business successful is income. Your first priority every minute of every day should be making sales. Businesses with income and profits survive. Businesses without income crash and burn quickly.

Customers buy things they like and know. They are wary of "new". Experience has taught them that "new" is not always better.

Your new business has a much better chance of being successful if you start with a product or service that has an established market. By all means, find your own twist and make it better than the competition, but please avoid the unfamiliar.

Most fads are not overnight success stories.

Red Bull created the market for energy drinks, but the founder lost more than a million dollars in his first two years of operations. It took six years for the company to become profitable. Dietrich Mateschitz has moved well beyond millionaire status in the last 17 years, but he had to come up with a million dollars in start up capital (half was his) and risk his life savings to make energy drinks a worldwide phenomenon.

Beanie Babies took off so quickly they seemed to be an overnight hit, but the truth is that this business success was hard earned. H. Ty Warner started Ty, Inc. in 1985 with a $50,000 inheritance, a home mortgage, and his life savings. The company's sales grew to an estimated $1 billion in 1998 after Beanie Babies launched in 1993, but Warner was not a newbie to the stuffed toy industry. He had 20 years experience at Dakin Inc., a San Francisco stuffed toy manufacturer, prior to his plunge into the toy industry. He marketed another line of stuffed toys for eight years before Beanie Babies were created to launch him beyond millionaire status.

You may think your great business idea will be the next Pet Rock (Gary Dahl became a millionaire in a matter of months back in 1975), but your chances of this happening are a lot like buying a lottery ticket. Lottery millionaires exist, but a heck of a lot of people buy lottery tickets to create that handful of millionaires. And a dollar spent on a lottery ticket does not compare to all the life savings wasted on unproven business ideas.

Running a business is complicated. When you start, it's best to sell something that has a proven track record. You will be better prepared if you spend a few years working in your chosen industry before you start your own business. If you don't have industry experience, make sure you either beg, borrow, or buy a system to help you get going. Even better, find a mentor that can help you through the rough spots.

Save the new ideas until you have something going. If you provide good service, sell a good product, and do what you say you will do when you say you will do it, your income will grow steadily. Establish your customer base first. It's much easier to sell new products to customers that already know and love you!