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Pilot operation

Simple Alliance, Kenya Limited

Answer the question why start a small business by Starting a business in pilot operation stage

A lot of times business owners overlook the importance of having a pilot operation before embarking on expansion of their businesses. However, a pilot operation for your business is important and especially if you would like to consider adopting franchising as a model for your business. It helps you determine whether it would be viable starting a business in a certain area.

There are instances when entrepreneurs overlook this importance and directly dive into business expansion without a pilot operation. This may be attributed to a number of factors which are in some cases valid though this applies to very rare case. Some of this may include:

Avoid being over confident

The confidence entrepreneurs have in themselves and in the products and services they offer the market is one reason they choose to overlook pilot operations. Entrepreneurs by definition are self-confident, but the problem comes in when an entrepreneur is over confident which in turn propels them into expansion and business growth without working out on any creases that may affect the expansion process. It is important that an entrepreneur has a proven and profitable pilot plan that will facilitate the expansion of the business; this is in most cases not possible with overconfident entrepreneurs who jump into expansion without working it out.

Differences in industries

The fact that an entrepreneur might have experienced and enjoyed success in another industry should not be used to assume that the same will apply for the industry they would like to venture into. Some of these industries are unrelated and the strategies put in place for one may not apply in the other. This has of essence played a crucial role in developing thee overconfidence that entrepreneurs develop during business expansion and hence ignoring the importance of a pilot operation. Assuming that one would expressly transfer the expertise they have into their new venture is equal to committing suicide in business.

Be patient

Haste is a big enemy to successful business expansion and entrepreneurs need to appreciate the fact that challenges while starting a business in whatever industry are inevitable. Deficiencies will always crop up in the first unit which in some cases may lead to losses, however this is the time an entrepreneur should work out all of these deficiencies as the try it out with the first unit and ensure that all creases are ironed out and they produce a positive income statement. At this stage if you can’t work out the deficiencies then you might consider abandoning the idea since it may never work. If you rush into establishing a chain of establishments at the start up stage and come across these challenges then the losses will be overwhelming for you.

The importance of a pilot operation, when starting a business and thinking about a business expansion cannot be overlooked. As much as it may be argued that there may be valid reasons skipping this step is taking a big business risk that could have been easily avoided. The major reasons that lead entrepreneurs to skip this are overconfidence and haste and the consequences could be dire. It is therefore important that a business owner starts out small and have a grasp of operations, ascertaining the profitability of the establishment before establishing a chain.

Copyright (C) 2016, Simple Alliance Kenya Limited

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