Podcast: Play in new window | Download
Subscribe: Apple Podcasts | Spotify | RSS | More
Updated May 4, 2023
Subtitle
Do not let the fear of making mistakes, costly or not, deter you from starting your new business
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 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 figure out how to fix them.
Introduction
Although mistakes made can be our most excellent teachers, they can be time-consuming and costly. What are some of the common mistakes entrepreneurs make when starting? I want to share the experiences and insights I gained from creating and building my small business, which began in 1984 and is still strong today.
Here is a list of ten common mistakes new entrepreneurs make when starting their businesses:
Mistake # 1. Making Absurd Forecasts
You need to research and develop realistic forecasts about how your services or products will sell. Can you bring in 60 customers in the first six months? Or is six more likely? Can you realistically sell 3,000 of your self-published books in the first year? Or is 250 more likely? Maybe 300 in the second year and 350 in your book’s third year are more realistic?
How are other books like yours selling on Amazon? If you forecast unusually high or overly optimistic sales and profitability, you do not have a realistic understanding of your business and market.
Mistake # 2. Relying on One Client or Product
That one client or one product might be enough to get your new business off the ground. But having only one certainly is not enough to keep your business growing.
Therefore, you must constantly try to add a variety of new clients, services, and products. Having many clients rather than one giant client is much safer for your business.
Ideally, you should strive to bring in clients of different sizes, industries, and demographics. And you should also be developing various services and products to sell to these clients. This variety will save your company when market conditions and consumer behaviors change.
Mistake # 3. Not Having a Unique Selling Point
Too many businesses start without ever asking these questions. That is a huge 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 starting your business.
Too many businesses start up without ever asking these questions. That is a huge 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, knocking on doors, or whatever works best for your business, it must never end.
The different ways to market your services and products are endless. Do not simply skip the marketing because of a limited budget. Even if you’re on a tight budget, you can still achieve great results if you put enough thought and effort into it.
Mistake # 5. Lacking Proper Start-up Capital
You must expect your start-up costs to be much more than you initially planned. A one-person small business might have little or no start-up costs. This type of business can become profitable immediately.
But, if you need an office, machinery, employees, supplies, etc., your start-up costs can quickly soar past what you initially planned. And, if you don’t have enough money to pay these start-up costs or do not figure out a way around them, you will not get past the break-even point for profitability.
Mistake # 6. Avoiding and Fearing Risk Too Much
As entrepreneurs, we naturally try to avoid uncalculated risk. But we should not avoid or fear all risks. We generally only take chances that have been well thought out. Understanding yourself, your business, your market, and your customers will help you know what risks are worth taking. The real issue is that you cannot exploit opportunities that come to you without taking risks.
Mistake # 7. Being a Control Freak
This mistake is not an issue if you are a one-person business. But, as soon as you start working with others, like partners, spouses, employees, and sub-contractors, you must share the decision-making power.
But you must convey your vision to everyone you work with to be on the same page. Getting others involved in your decision-making process and collaborating on ideas will make your business more robust and prosperous.
Mistake # 8. Not Anticipating Your Customers’ Needs
Anticipating what services or products your current customers will need after your initial sale can significantly increase your company’s sales. It will 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 quickly 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 you show up each season, take good care of their system, and keep it running perfectly.
They get to see you in action and chat with you. You then ask them to give your business card to other homeowners, neighbors, friends, and relatives looking for HVAC work. You get to keep your customers happy, connect emotionally with them, and go home with a $150 profit. If you didn’t come back every Spring and Fall, the customer would need someone else to take care of their HVAC system.
Mistake # 9. Believing the Flexible Hours Myth
Starting a business will take up a considerable amount of your time. Even if you create a small, part-time business, you will expend much 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 you enjoy what you are doing, the more it will make it much easier – even make it a joy – to spend 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, personalized service should be one of your most significant selling points. This personalization can be as simple as giving out the owner’s email address and cell phone number.
This point gives you a considerable advantage over the larger companies. Or you have a friendly person answering the telephone, not a cold, heartless, uncaring answering 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 many ways to connect your company emotionally with your clients.
Conclusion
Do not let the fear of making mistakes, costly or not, deter you from starting your new business. Accept that you will make mistakes. We all do. How you deal with those mistakes will make you a success or failure. Making mistakes, understanding why you made them, and learning how to fix them and avoid them in the future, indeed, will be your most outstanding teacher.
Questions to Think About
1. What kind of mistakes did you make when starting a business?
2. How did you deal with and fix those mistakes?
