MoneyMagpie

Nov 10

7 most common business mistakes new entrepreneurs make

What are the most common business mistakes? Here they are, plus ways that you can avoid them.

Ask any entrepreneur why they left the corporate world and this is what they’ll tell you.

“To do what I love”

“To be my own boss”

“To live the dream”

They wanted to leave the shackles of working a 9-5 job and focus on something that gives them as much as they give to it.

And it’s exactly how I felt when I left my corporate gig in early 2015.

Starry-eyed with a head full of dreams, I started on my entrepreneurial journey with expectations of how this new life would be:

Clients would flow to me when I wanted

I’d work hard and be rewarded for every risky move I made

Every day would be uplifting

Only it wasn’t quite the case.

I was working more hours than I had in my corporate gig, was trying many new things only to see them fail, and was seeing my bank balance dwindle with every passing week.

So I spoke to other business owners to see if they could relate.

As I started to scratch beneath the surface, I saw that they felt the same.

In fact, we all made the same seven mistakes that were severely hindering our businesses.

In this article, I’ll outline the seven most common mistakes, the one piece of advice they’ll give you to minimise risk and the real reason why you haven’t started a business yet.

 

MISTAKE 1: EXPECTING SUCCESS TOO SOON

business mistakesNo matter the foundations you start off with, nothing ever goes to plan. And expecting your business to be an overnight success is tempting disappointment on a grand scale.

While success in business may take months rather than years, it helps to keep a monthly log of everything you tried, what worked and what didn’t.

At least then, when you assess your progress in six month, you have a clear idea of exactly where you’ve been.

 

MISTAKE 2: CONSTANT COMPETITION COMPARISON

business mistakesKeeping one eye on your competitors is smart for deciding how you’ll stand out in a crowded market.

However, this becomes toxic when all you do is compare yourself to them, especially if you feel dejected when you read their success stories (and yours don’t follow a similar path).

Alleviate this by cutting off comparison altogether. Unsubscribe from their email lists, stop following them on social media and block updates from the Facebook groups that constantly scream about success stories.

This means you decide when you want to update yourself on their progress, rather than having the information pushed in your face all day.

 

MISTAKE 3: IGNORING THE STATS

business mistakesMeasuring statistics isn’t something that’s reserved for those making more than six figure incomes.

Even if you have a small email list and aren’t hitting your monthly income goals, measuring what works and what doesn’t is a strong way to start as you mean to go on.

Look at email open rates for different subject lines, identify which activities get the most traffic or make the most money, and keep a monthly log of them.

Then plan to do more of those activities to build your business.

 

MISTAKE 4: GETTING TOO SOCIAL

business mistakesSocial media’s expertly tailored to speak to one of the most basic of human needs – connection. This is why so many people spend so much time browsing their Twitter feed, scouring Facebook or double-tapping Instagram.

And most entrepreneurs assume time on social media’s time well spent.

The truth is, while social media does help build your brand, it’s an investment for the long term. Currently, if the time you spend on social media sites doesn’t bring a return, then your time isn’t an investment – it’s a waste.

To help structure your day better, spend an hour on social media in total, and stick to those sites where your customers are more likely to be.

 

MISTAKE 5: SUFFERING FROM SHINY OBJECT SYNDROME

business mistakesShiny object syndrome for entrepreneurs is centred on buying courses.

With a shiny, new course being released by your favourite teacher, it’s easy to get sucked in and assume it’ll have the golden bullet to skyrocket your business (especially when the sales copy’s so convincing).

To decide if it does, take a look at what courses or tools you’ve purchased in the last 12 months. How many of them have genuinely moved your business forward? How many of them have helped you achieve your goals?

I’m guessing not many.

Remedy this by either setting yourself an income goal, after which you can buy something else, or take a 12 month purchasing fast. Then focus your energy on using the courses and tools you already have to meet your goals (before you go on a buying spree again).

 

MISTAKE 6: WORKING ALONE

business mistakesWorking from home, especially after you spent years working in a busy office, can be the most difficult adjustment to make as a new business owner.

The silence in the room, the lack of water-cooler conversation, the voices in your head … they all add up.

While you may not replace old colleagues with new ones, you can explore where you live for viable co-working spaces and café’s to work from a few times a week.

Take this a step further and ask friends who they know that’s also a solo-preneur. Then make plans to meet with these people weekly so you can co-work together. Solidarity!

 

MISTAKE 7: CONSTANT FREELANCE MODE

When you’re a service provider and first start out, it’s easy to get sucked into the 1-1 client relationships and still exchanging time for money.

business mistakesAlthough this can be fruitful when landing a client that pays higher fees, it can limit financial and creative growth if working with clients is all you do.

Be brave and take half a day a week (or every fortnight if weekly is too much of a stretch) to think of the bigger picture.

How can you turn your services into a revenue-generating product? What joint venture opportunities can you identify? Can you create a course or write a book that teaches your expertise?

We’ve all been there – stuck in our own heads and wondering when the day will come when business becomes … fun.

Know that it may take longer than you planned, and the course of events will change more than you care to admit, but keep at it and you’ll be one step closer to living the dream.

Also…

 

RISK BUSINESS FAILURE IF YOU MISS THIS ONE STEP

business mistakes“If you want to start a business you love, follow your passion”

If I read this advice one more time, I’ll gag.

Mainly because it’s new-age woo-woo theory that makes people hate their jobs, but mostly because it’s completely false.

If I were to follow my passion? I’d be making money by spending all day sprawled on the sofa eating fresh baguettes and watching re-runs of The Gilmore Girls.

That’s never going to happen.

So if following your passion isn’t the thing you’re supposed to do when it comes to starting your own business, then what is?

 

WHY DO YOU WANT TO START YOUR OWN BUSINESS IN THE FIRST PLACE?

There’s a very popular video by Simon Sinek where he talks about why you do something being more important than what or how you do it.business mistakes

Why? Because your reason keeps you going.

An emotional connection to this reason means you push through the tough times in business (when you have a difficult client, or when you’re not making money), and makes the great times even better.

Is your reason altruistic? Do you see a gap in the market that your skills can fill? Is there a problem many people have that you’ve found the solution for? (like poo-pourri – genius!)

Whatever your reasons for starting, make sure you’re clear on what they are or you may risk business failure. So your first action step is to:

Write down 5 reasons why you want to start a business

business mistakesNow you know the reasons for starting a business, let’s talk about how ambitious you are with the venture.

Cue: images of Richard Branson, Bill Gates and a very short Sir Alan Sugar in a leather chair.

How ambitious you are is entirely up to you.

You can be as humble as having a side-gig to your day job, or as industrious as aiming to have a multi-national business and thousands of employees.

 

How big do you want to go?

The size of business you create will influence the type of people you ask for advice, the research you do, and the mentors you have. Think about how you want the business to fit into your life.

business mistakesDecide on the type of business you want to build by answering these questions:

I want to run my business from __________ (home, an office, anywhere in the world, Plant Mars (as long as there’s wifi))

I want to have ___ (number) employees

The final goal is to ______ (run my business along my job, sell my business, leave my job for this business full time)

That’s action step 2 ticked.

The last and final action step is to decide the business model you want to run with. What does this mean? It’s all about how you’ll serve your customers, and how you’ll earn money.

Here are some examples for clarity:

  • Personal service: Nanny, web design, writer, coach, personal trainer
  • Product sales: Clothes, jewellery, food, wine, coffee
  • Subscription/membership service: Web hosting, gym/club, group coach
  • Reseller: Affiliate products, ebay

If you want to be a reseller, for example, you know that your business is reliant on finding the right products to sell to your customers with varying prices.

If it’s a personal service, you know you’ll have a 1-1 relationship with your clients and your earning potential is directly linked to the amount of time you spend.

So we’ve looked at why you want to start a business, and the type of business you want to build and the structure of it.

 

THE HONEST TRUTH ABOUT WHY YOU HAVEN’T STARTED A BUSINESS YET (THAT NOBODY WILL TELL YOU)

  • Being your own boss.
  • Creating a business around your natural talents.
  • Or simply working from your own home.
  • You’ve wanted this for years … so why you haven’t started a business yet?

Many people dream of having their own business. Whether it’s quitting their job completely, or having a side-business to supplement income from a full-time job (read: more money for holidays and shoes – even if they are for the kids).

business mistakesBut why do so many people dream, but not many do?

Working for yourself is one of the most rewarding things you can do. Whether you want to create the next Google or have an extra £500 a month to spend on holidays and going out – there’s no limit to where you can go.

Starting a business isn’t for everyone. I know that a significant percentage of Money Magpie readers want to do it, but they simply haven’t started.

I’m interested in the reasons why. What are we telling ourselves that’s hold us back? What misconceptions do we have that need to be busted?

Let’s take a look at the most popular reasons why people don’t start a business. Do you see yourself in any of them?

 

SELF-SABOTAGE

business mistakesYour thoughts are your enemy … if you allow them to be.

Self-deprecation can lead you to think:

I don’t have enough experience for anyone to take me seriously

When I tell my friends and family about my idea, they’re sure to mock me

Why leave my stable job? Even running this business on the side will mean more work than I can cope with

And on and on your lizard brain goes. Encouraging you to run when there’s no mammoth in sight.

Fear will always be there, so rather than suppressing it – learn from it.

Listen to your thoughts and find ways of addressing them so they don’t scare you.

For example, I don’t have enough experience for anyone to take me seriously can be addressed with:

  • How can I get more experience in the area I want to do business in?
  • Who else has started a business with no previous experience? What can I learn from them?
  • What kind of business can I start where my lack of experience is a non-issue?

Who’s scared now?

 

NO LIGHT BULB MOMENT

business mistakes“I want to start a business, but I don’t have an idea”

“I could make a business work, but with the right idea”

“I have so many ideas –  which one of them will work?”

The reality is that ideas are a dime a dozen.

(Side note: I’ll be teaching you how to find a profitable business idea in an upcoming article. So for those of you who worry they don’t have any ideas? You’ll have at least 10 by the time you’re done)

But taking those ideas and making one of them profitable? Is one of the biggest reasons why businesses fail.

Not because they didn’t make the business work, but the fact that they didn’t test the idea first.

The only way to know if your idea will sell? Is to sell it to people. Notice to plural (there’s a reason why 1-customer businesses just aren’t a thing).

I’ll be teaching you how to generate ideas, test them, and find people to sell to in an upcoming article.

 

IGNORANCE . . .

Ignorance is bliss, until you need the knowledge you’re missing.

business mistakesOften the most daunting thing about starting a business is being clueless about how to physically set things up.

I get it – for those that use the internet for Facebook or the occasional gander at what Kim Kardashian is up to, using it to start and run a business can seem daunting.

  • How do I register a domain name and get my website up and running?
  • At what point do I think about that social media thing?
  • How on earth do I build traffic and why doesn’t it involve cars?

These are just some of the thoughts that go around your head when you’re having a technophobe meltdown.

Fortunately, the answers to your questions are a quick Google search away. It really is that simple.

But I won’t leave you at the mercy of Google to answer these questions – we’ll cover all these and more, in up-coming articles.

Stay tuned! (Or do the smart thing and subscribe to updates).

 

PLAYING ENTREPRENEUR

If you’ve done the following without ever having made a penny, I’m raising my brow at you:

  • business mistakesPrinting business cards
  • Creating an all-purpose website
  • Setting up Facebook, Twitter, and Instagram accounts

Can anyone else smell procrastination?

Kill me.

A business that doesn’t make any money isn’t a business – it’s a hobby.

And an expensive one at that.

This isn’t to say that you can’t put some money into your business as an investment. But in the early days, make this investment minimal. You can then re-invest as you grow.

The beauty of this digital age we’re in? Is that the internet has made it cheaper to start a business now, than at any other point in history.

You don’t need to rent an expensive bricks ‘n’ mortar store to sell your products – your website is your store.

  • Renting a meeting room for clients isn’t necessary – hop on a Skype call.
  • Don’t look for physical office space – you can work virtually.
  • The possibilities of business are endless, thanks to the internet.
  • Because you can be your own boss, you can work from your own home, and you can master your destiny.

 

I’M CURIOUS: WHAT ARE THE REASONS WHY YOU HAVEN’T STARTED YOUR BUSINESS? FROM THE RATIONAL TO THE ABSURD. GIVE THEM TO ME IN THE COMMENTS.

Let me know in the comments below and I will answer any questions you  have…

 

Razwana Wahid is the founder of Relentless Movement. A copywriting service for coaches who want to write bold and sell big. She’s the author of the definitive game plan for coaches to brand your business, market your services, and run your coaching practice like a pro. Download your copy of the book here.

Relish Business

Comments

6 thoughts on 7 most common business mistakes new entrepreneurs make

  1. I’m thinking of starting a small business selling unique sweet cones for both adults and children. I plan to start small in my local area (maybe start a Facebook page) and then build up. I just wondered what legal obligations there are? Also would I need to inform my landlord and declare this to the tax office?

    Some tips of how to get started would also be appreciated.

    Many thanks

    Reply
    1. That sounds like a really good idea Vicki.

      If you are making the sweets yourself then there is a certificate you need to get. Take a look at our article here http://www.moneymagpie.com/make-money/make-money-selling-cakes which has a lot of info on that.

      If you are having lots of people coming and going, maybe setting up extra ovens or similar in your home then yes, you should let your landlord know. If it’s just something you are running from home in terms of doing the admin, phoning etc then it’s probably not necessary.

      You will need to contact HMRC when you start, or within three months of starting, to let them know that you are now freelance – or running a freelance business on the side – so that they can give you the right tax code.

      Do make sure you keep receipts for all your expenses, including travel to and from going to see potential clients, looking at market stalls or anything else you need to do while setting up your business. All these expenses can be put against your income for tax purposes later on.

      I’m sure Razwana will have some useful tis to add to this as well!

      Reply
    2. Excellent advice here from Jasmine, as always. Looks like the legal side is covered!

      Since you’re starting local, I advise you to not invest your time in Facebook or other social media just yet. Ensure you have a market of hungry customers first (sell at local markets, sell to stores that will sell the cones with other things they already sell) and build from there.

      Once you have a basic monthly income from it, you can then move some of the marketing onto social media.

      This does two things:

      1. Validates that there’s a market for what you’re selling
      2. Allows you to get to know your audience first so you can target your social media campaigns accordingly.

      Good luck and let us know if you have more questions.

      Reply
  2. Hi Abdul – there’s a positive in your experience with seeing someone doing the same thing as your idea, or your invention. It means a market already exists – which means there’s room for more than 1 player.

    There are so many marketing agencies, or copywriters in the world. I’m one of them, and the pool is big enough for all the fish!

    In terms of money and family support – everything won’t be in place to start your business the right way, or at the right time. The secret is simply to start. Start small and build from there.

    Reply
  3. I have had many ideas but as soon as i research more on the internet I find someone somewhere is doing exactly the same. Or that the great invention idea already exists. Another thing that knocks me down is the fact I haven’t got money to start with or people to support me in starting.

    Reply
    1. Hi Abdul. Often when the idea already exists, it means there’s a market for it and you’re on the right track!

      When you come across this, ask yourself: what can I create that buyers of this product will also want? Think about when you buy shoes and you’re offered accessories like brushes and creams to keep the shoes in good condition – these are supportive products that the market is interested in.

      Reply

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