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What is it many new businesses all have in common? They tend to all make the same business mistakes when they start out. We thought it would be helpful to list them for you and offer ways to avoid them.
Ask any entrepreneur why they left their corporate life behind and they’ll normally tell you one of three things:
They wanted to be free from the shackles of their 9-5 job. Focusing on doing what they really enjoy and excel at. Something that gives them back just as much as they put in.
And that’s exactly how I felt when I left my corporate position 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:
Only it wasn’t quite the case.
I was working more hours than I had in my previous job for a start. I was also trying many new things, only to see them fail. I also 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 had all made the same seven business mistakes.
Business mistakes that were severely hindering our ambitions.
In this article, I’ll outline the seven most common business mistakes, and what you can do to avoid making them.
No 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.
Keeping 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.
Measuring 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. As you grow, consider investing in business intelligence software to help you make better informed decisions, improve efficiencies, track goals and growth.
Social 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.
Shiny 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).
Working 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. It all takes a toll. Humans are social creatures after all!
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!
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.
Although 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. We went solo to enjoy what we do!
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.
“If you want to start a business you love, follow your passion”
If I read this advice one more time, I swear 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?
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.
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?
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:
Now 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.
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.
Decide 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:
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.
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.
But 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?
Your thoughts are your enemy … if you allow them to be.
Self-deprecation can lead you to think:
And on and on your inner voice goes.
Fear will always be there, so rather than suppressing it; learn to embrace 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:
“I want to start a business, but I don’t have an idea”
“Could I make a business work, but with the right idea”
“I have so many ideas, which one of them will work?”
Do any of these questions resonate with you? Truth is ideas are a dime a dozen. 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 simply aren’t sustainable).
Ignorance is bliss, until you need the knowledge you’re missing.
Often 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 too, using it to start and run a business can seem daunting.
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).
Have you ever taken any of the following steps but not actually set up your business?
Can anyone else sense procrastination?
A business that doesn’t make any money isn’t a business, it’s a hobby. It needs investment and commitment to get the ball rolling.
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.
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.
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Great advices and encouragement. I read them all. I want to start my own business here in the Philippines but competition is tough. And I want to have my own website but don’t have the knowledge to create one. Please help. More power to the MoneyMagpie staff! Thanks!
Good idea If you use a site like Weebly or Wix it’s easy to create your own site. Take a look at those. keep going!
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.
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 https://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… Read more »
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.… Read more »
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.
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.
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.