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Synopsis
Although mistakes made can be our greatest teacher, they can be time-consuming and costly. So here I share with you my hard-earned experiences and insights that I gained from creating and building my small business.
What You Will Learn
1. You will learn about ten time-consuming and costly mistakes that can be avoided.
2. You will learn from my business experiences about understanding these mistakes.
3. You will learn why it is so important to learn from these mistakes, and then figuring out how to fix them.
Introduction
What are some of the common mistakes entrepreneurs make when starting out? Here is a list of ten more of the most common mistakes new entrepreneurs make when starting their businesses. Although mistakes made can be our greatest teacher, they can be time-consuming and costly.
So, here I want to share with you my hard-earned experiences and the insight I gained from creating and building my small business, which was started in 1984, and is still going strong today.
Mistake # 1. Making Absurd Forecasts
Is it realistic that you can bring in 60 customers in the first 6 months? Or is 6 more likely? Can you realistically sell 3,000 books of your self-published book in the first year? Or is 300 more likely? Maybe 600 in the second year and 900 in your book’s third year is more realistic? How are other books like yours selling on Amazon?
You need to do some serious research and try to come up with realistic forecasts about how your services or products will sell. If you forecast unusually high or overly optimistic sales and profitability, it indicates that you don’t have a realistic understanding of your own business and the market that you’re in.
Mistake # 2. Relying On One Client Or One Product
That one client or one product might be enough to get your new business off the ground. But having only one certainly won’t be enough to keep your business growing. Therefore, you must constantly be trying to add a variety of new clients, new services, and new products. It’s much safer for your business to have many little clients instead of one giant client.
Ideally, you should be striving to bring in a variety of clients of different sizes, industries, and demographics. And you should also be developing a variety of services and products that can be sold to these same clients. This variety is what will save your company when market conditions and consumer behavior changes.
Mistake # 3. Not Having A Unique Selling Point
Why will your customers buy your service or product? Why you? Why not someone else? What are you offering that makes your services and your products special? What do you bring to the table that the others don’t? You better have a very good answer to these questions before starting your business.
Too many businesses start up without ever asking these questions. That’s a very big mistake. If you want to build a successful business – one that you can be proud of, and that also gives you a steady stream of income – then you must answer these questions before you start your new business.
Mistake # 4. Not Doing Enough Marketing
You can never do enough marketing. Whether it involves social media, email marketing, direct marketing, word-of-mouth marketing, print ads, or whatever works best for your business, it must never end.
The different ways to market your services and products are endless. Even if you’re on a tight budget, you can still achieve great results if you put enough thought and effort into it. Don’t just simply skip the marketing because of a limited budget.
Mistake # 5. Lacking Proper Start-Up Capital
You must expect that your start-up costs will be much more than you initially planned on spending. A one-person small business might have little or no start-up costs. This type of business can become profitable immediately. But, if you’re going to need an office, machinery, employees, supplies, etc., your start-up costs can easily soar past what you initially planned on.
And if you don’t have enough money to pay these start-up costs, or don’t figure out a way around them, you could be prevented from getting past the break-even point for profitability.
Mistake # 6. Avoiding And Fearing Risk Too Much
As entrepreneurs, we naturally try to avoid uncalculated risk. We generally only take risks that have been well thought out. But we shouldn’t avoid or fear all risk. The real issue is that without taking risks, you cannot exploit opportunities that come to you. You can very simply live a quiet and reasonably happy life, but you are unlikely to create something new, and you’re unlikely to make your mark on the world.
Mistake # 7. Being A Control Freak
This isn’t an issue if you’re a one-person business. But, as soon as you start working with others, like partners, spouses, employees, and sub-contractors, you need to share the decision-making power. As the owner of the business, you’ll certainly have the last word.
And as the owner your overall vision is what is the most important. But, you need to convey your vision to everyone else that you work with so that you’re all on the same page. Getting others involved in your decision-making process and collaborating on ideas will make your business much stronger.
Mistake # 8. Not Anticipating Your Customers’ Needs
Anticipating what services or products your current customers will need after your initial sale can greatly increase your company’s sales. It’ll also create a greater bond between you and your customers. Let’s say, for example, that you install HVAC systems in residential homes.
You can easily return every Spring and Fall to do a tune-up, change filters, etc., on the system and charge $200 (e.g.: $50/parts, and $150/labor) for about 30 minutes of work. The customer will be grateful that you show up each season, take good care of their system, and keep it running perfectly.
They get to see you in person and chat with you. You then ask them to give your business card to other homeowners, neighbors, friends, and relatives that might be looking for HVAC work in their own home. You get to keep your customer happy, make an emotional connection with them, and go home with a $150 profit in your pocket. If you didn’t come back every Spring and Fall, the customer would need to find someone else to take care of their HVAC system.
Mistake # 9. Believing The Flexible Hours Myth
Starting a business will take up a huge amount of your time. Even if you start a small, part-time business, you will expend a lot of time and effort to get it going and keep it growing. But, the more time and effort you put into it, the more you will get out of it.
Therefore, you better choose a business that you love to work on. The more that you like what you are doing will make it much easier – even make it a joy – to be spending so much time, effort, and money, on building your business.
Mistake # 10. Ignoring Your Customers
Ignoring customers after the initial sale is a big problem for many businesses. But as a small business one of your biggest selling points should be personalized service. This gives you a huge advantage over larger companies. This can be as simple as giving out the owner’s email address and cell phone number.
Or, having a real person answering the telephone, not a machine. Look, there is always another business actively trying to take your customers. The minute your customers feel ignored or neglected by you, they will be more open to talking to other businesses. They will feel less affinity for you and your company. Therefore, you must find as many ways as possible to create an emotional connection between your company and your clients.
Conclusion
With all of that said, please feel free to completely ignore this advice, or listen to it and keep it in the back of your mind while you’re starting your new business. But, just don’t let the fear of making mistakes, costly or not, to deter you from starting your new business. Making mistakes, and understanding why you made them, and learning how to fix them and avoid them in the future, truly will be your greatest teacher.
Questions For Us To Think About And Discuss
1. What kind of mistakes did you make when first starting out in business?
2. How did you deal with and fix those mistakes?
