12 mistakes to avoid before trying to start your own business.
How many times have you failed at something you really wanted to do but, no matter how hard you tried, it just did not work out?
And, it wasn’t through lack of commitment, or courage, or drive, or hard work.
It was because you didn’t know what you didn’t know!
Good advice can make the difference between success and costly failure.
Someone, somewhere, has already been on the journey you are about to take.
That journey has given them knowledge, experience and valuable insight that could take you years to acquire on your own.
Simple mistakes, that in hindsight seem obvious, can kill your dreams before they have a chance to grow.
It’s said that only a fool learns from his own mistakes. The wise man learns from the mistakes of others. In truth, I’ve have been that fool too often!
Here are 12 mistakes too many new entrepreneurs make and how to avoid them.
Mistake #1. Quitting your day job on day 1
If you’re in a day job and desperate to quit to start your own business, and take control of your life, don’t jump too soon.
Use the time you have right now to prepare yourself whilst you have the luxury of a monthly paycheck. This way you don’t put family commitments unnecessarily at risk.
Use your morning train journey, lunch breaks, evenings and maybe some weekends to do the groundwork, the research and planning so when the time comes to quit the 9 to 5 you will be starting from the best possible position on a path to success.
Use this time to get your finances in order. If your finances are laden with debts on cars, holidays, gadgets, etc, step back for a moment and look to see how you can cut back, cancel and pay-off anything you really don’t need before you start.
Minimise debts before you quit the day job. You will be glad you did.
Unless you have enough money in the bank to pay yourself for the next year at least, don’t give up the day job too soon.
I have started too many businesses in my life to know that you don’t have to try and start your new business overnight.
Take it at your own pace, but set realistic deadlines or procrastination will creep in and your dream will stay forever a dream.
Mistake #2. Letting early failures defeat you
This can be one of the hardest hurdles to jump. The truth is that failures and setbacks will happen. You can count on it, especially at the beginning and yes; they will knock the wind out of you. Remember it’s the same for everyone. Even the world’s most successful entrepreneurs have faced failure many times yet still carried on.
“I’ve missed more than 9,000 shots in my career. I’ve lost almost 300 games. 26 times I’ve been trusted to take the game’s winning shot and missed. I’ve failed over and over and over again in my life and that’s why I succeed.” – Michael Jordan, NBA Hall of Famer.
One of the most common reasons new businesses fail is that they give up too soon. They hit the wall, get de-motivated, and lose confidence in themselves and their idea. You have to dig deep.
I have to own up here and say I have given up on many ideas that, in hindsight, still had everything going for them because either they used up too much energy and enthusiasm too early on, or I just let a few setbacks destroy my faith in the idea.
“Never give in–never, never, never, never, in nothing great or small, large or petty, never give in except to convictions of honour and good sense…” – Winston Churchill
Mistake #3. Starting without a plan
If you don’t know where you’re going, you might not get there.
Without a plan even the most brilliant business can get lost. You need to have goals, create milestones and have a strategy in place to set yourself up for success.
It’s ok to change your mind along the way and a good plan should not be set in stone; it should grow and change as you move forward and as your idea improves and is refined.
Setting out a clear plan of why, as well as how and when, before you start will save you a lot of pain and expense (and possibly even relationships) further down the road.
Setting out a clear plan will help you spot any weaknesses or vague areas you may not have thought through properly.
Mistake #4: Not knowing whom your customer is
This may sound obvious I know, but many people launch their new business before they have clearly identified whom their customer is and how to reach them.
Research, research, research – I can’t say it too many times.
One way to do this is to build a profile of your ideal customer. The more you know about your potential customer the easier it is to talk their language and answer their need.
Smart entrepreneurs know exactly who their customers are and what they need. This understanding is absolutely critical.
What type of person they are:
- Age
- Gender
- Location
- Motive to buy
- What do they read online
- What are their likes/ dislikes
- Where do they hang out on Social Media?
Don’t assume you know.
Mistake #5: Underestimating costs.
Stay debt free!
I am a firm believer in bootstrapping as an entrepreneur. By this, I mean doing as many if not all of the early tasks involved in starting your own business yourself without borrowing money or seeking outside investment (in other words being self-funded).
This is the cautious approach and the way I would recommend you begin. It also means putting your own house in order before you start.
This approach means you are always in control of the costs, which means less risk, less stress and fewer sleepless nights. I have seen too many entrepreneurs fail early on in the journey because they did not manage their finances properly.
Yes it might take you longer to launch, but if it does fail you are more able to bounce back and try again.
You don’t want to have to go back to the day job in 6 months time because you have already blown your savings and budget, leaving you worse off than when you started.
Starting your own business is hard enough without the constant worry that you might lose your house along with your business.
Mistake #6: Wasting time on things you should not be doing
‘To Do’ lists are fine but, if you’re not careful, they can become your worst enemy. They are too easy to add to and are a constant reminder of everything you haven’t done yet.
“So often people are working hard at the wrong thing. Working on the right thing is probably more important than working hard.” – Flickr co-founder
I would recommend making a ‘Un To Do’ list and stop wasting your precious time. Every task on your list comes at the expense of something else – a new opportunity. This is especially true if you are doing all the tasks of starting up your business yourself.
When you first start your own business budgets are tight or non- existent, and the chances are you are doing everything yourself (bootstrapping). You’re doing the research, the product development, the planning, the website build, the photography, writing the content, doing the press releases, finding suppliers, finding customers, networking, trying to build a social media following… the list is endless.
All this means little time left for the family or yourself; the dog suffers, the garden becomes overgrown and you have forgotten the last time you had a relaxing evening with friends.
Stop tinkering!
Mistake #7: Assuming ‘if I build it they will come’ – they won’t!
You must be able and willing to reach out to customers, to network, communicate, interact and spread the word at every opportunity.
You cannot work in isolation. You need mentors, advice and feedback.
You must be able to listen (not preach) to customers, build relationships along with trust and loyalty.
“In the modern world of business, it is useless to be a creative, original thinker unless you can also sell what you create.” – David Ogilvy
At the exact time of writing this article there are 943,999,981 websites live online. That is up from 1 website back in 1991. That’s a lot of websites competing for attention. How is anyone going to find yours?
Don’t panic! What this really means is that you have to be patient. Building an audience, a community, a loyal following and a customer base takes time. It will not happen overnight, whatever some online gurus say.
I would recommend you start building an online following before you launch your new business. That way, by the time you are ready to launch you will already have the beginnings of an interested audience to present your new product to. Don’t wait – do it now!
Mistake #8. Only dreaming big
The Internet is full of quotes from successful entrepreneurs who say things like:
‘Thing big, dream big, believe big, and the results will be big’
‘If you’re going to think anything, you might as well think big”
Yes, dream big, but make that dream the result of little dreams along the way. If you make the goal too big too early you risk expecting too much from yourself, you drive yourself into the ground trying to meet those expectations. The trick is to manage those expectations.
Set goals:
- What are you ultimately trying to achieve?
- What is your definition of success?
- What do you need to do to make this outcome happen?
- What do you want to achieve in 6 months, 12 months, 2 years, and 10 years?
Mistake #9: Not identifying a gap in the market
A ‘start-up’ is often defined as a company that is confused about:
- What its product is
- Who its customers are
- How to make money
One of my first online businesses was based on a drop-ship model. There are lots out there and it is temptingly easy to set-up and launch your new site full of products in a matter of weeks.
The trouble is you then quickly realise that you have just jumped into a crowded market (because it was easy to set-up lots of other people are doing it too) all selling the same stuff at the same margins to the same customer base.
Worse still you find the drop-shipping company who are supplying you with products is already on page 1 of Google selling all the stuff you’re trying to sell, and at a much lower price than yours could ever be.
Look for a gap in the market. Your product does not have to be unique. In fact it can be easier if you have a few competitors, because by researching what they are doing right and wrong, you can learn from them.
Being first to market means you will be the first to make the mistakes and others will learn at your expense.
Mistake #10: Not making sure it can be profitable and scalable
Without a decent profit margin your business will not survive and grow. There is no point working yourself into the ground building a new business that is never going to pay you enough to live comfortably.
Yes you want to do something you enjoy but you need to eat and pay the bills too. You’re not in business to be poor.
Make sure your idea is scalable – it must be able to make money for you while you sleep.
Mistake #11: Being too impatient
Too many first time entrepreneurs fail because of impatience. They expect success too early in the game and are not prepared for failure. This leads them to take shortcuts and sacrifice customer value for quick profit. Business is not a sprint, it’s a marathon.
“Timing, perseverance, and ten years of trying will eventually make you look like an overnight success.”
Mistake #12: Trying to go it alone
As a bootstrapping entrepreneur I prefer to start on my own and without a partner. It is less complicated, I can be more focused and overheads are lower.
However, successful entrepreneurs don’t work in isolation. You can’t do it all on your own. You definitely need feedback, opinions, guidance, mentors and connections to help you make your idea a reality and a success, but be selective who you ask.
Conclusion
- Do as much as you can before you quit the day job.
- Settle as many debts as you can.
- Build up some savings to give yourself a cushion. You need to get good at managing your money, otherwise you will be back in the day job before you know it.
- Get rid of the things you don’t need. We all have way too much material stuff that we don’t actually need to have a good life.
- Read as much as you can around what it is you are trying to achieve. Look at how other successful entrepreneurs have built their dream.
Finally, I want to leave you with a quote I like which I know will help you on your journey.
‘Discipline is doing things you don’t necessarily like, in order to achieve something you love’
