Six Costly Mistakes New Business Owners Make And How To Avoid Them
If youâ€™ve already started a business then youâ€™ve probably made at least one of these mistakes. Iâ€™ve made most of them. Some of the over and over again â€“ eeek!!
I hope this article saves you some heartache and helps you to avoid making some of the mistakes new business owners make.
(1) Getting the wrong education
When I started my first business I had no idea of all the wonderful training available to business owners. So in my ignorance I trotted off to my local TAFE to do a few subjects from a Certificate IV in Small Business. For me these subjects were a waste of my time and money. The content was out of date, was very theoretical and was really, really dry (and I studied law so thatâ€™s really saying something!)
A couple of years later I discovered Marie Forleo and her B-School and my eyes opened to a world of amazing entrepreneurs offering practical training in every aspect of business and personal development you can imagine.
So before spending your money on education do your research well and learn from those teachers you really respect and admire.
(2) Choosing your business idea based on profits rather than passion
Yes, of course, when choosing your business idea you need to do your research to be confident that the business has the potential to be profitable. But equally important is to choose something that you enjoy and are passionate about. This is just about sustainability, really. Building a business can be a long process. And working through the challenging times when youâ€™re tired, confused and frustrated takes more than just the motivation that you might make a profit. Thatâ€™s when you need a stronger drive. Thatâ€™s when the passion comes in.
(3) Putting marketing on the back burner or not having a long-term marketing plan
Oh, I was SO guilty of this one. I spent 6 months setting up my first business and during that time I gave only a fleeting thought to marketing. â€œIâ€™ll work that out laterâ€, I said to myself. Big mistake. BIG. Just because you build it does not mean they will come. Nope, they wonâ€™t.
The time to think about marketing is right back when youâ€™re conceiving the idea for your business. Right back at the start when youâ€™re thinking about who your customers will be and how you will help them. Thatâ€™s also the time to work out how you will find your potential customers, how you will engage them and how you will communicate with them. When you work that out youâ€™ll have a better idea of what kind of marketing you will adopt and need to budget for.
(4) Spending money on all the wrong things
It can cost a lot of money to start up a business. A website can cost up to $10,000 and if you need to purchase capital and stock then you can be out of pocket quite substantially. But if you think outside the box it is possible to start a business with a limited budget. You just need to make sure you spend your money on all the right things.
When I started my first business I had some money saved up to get me started. I made a list of everything I needed, did a budget and got going. As I mentioned above, I certainly wasted some of that money on getting the wrong education but overall I think I did get this mostly right.
My first business was an online toy store so getting a great website with a shopping cart was top priority. Then the quotes from the website developers came in, $5,000 and then $8,000. Yikes, I only had a budget of $10,000 to set up the whole business and that included purchasing stock (and I wanted to put at least $5,000 toward that). So I went searching for cheaper options and thatâ€™s when I came across a great service called Spiffy Stores. With Spiffy Stores I got a website with no upfront costs. I just had to pay a small fee each month (it started at $30) and then a percentage of my sales. Perfect.
Iâ€™ve since learned that there are many cheap options available for setting up a website on the cheap, especially if youâ€™re prepared to have a go at a little DIY. The cheaper the option, usually the more design and technical work youâ€™ll need to do yourself. Just know that you donâ€™t need to spend a fortune and there is an option out there thatâ€™s perfect for you.
As I had saved all that money on my website I was able to invest in having my branding all professionally designed. Now that was definitely worth the investment. With a beautiful logo and images for my website no-one had any idea that my website was a cheapie. And I was able to use that branding material over and over again in promotional materials so I well and truly got my moneyâ€™s worth.
One big mistake I did make was spending $1,000 on a small advert at the back of a national magazine. I was convinced to make the investment because $1,000 was their mega discounted rate resulting from another advertiser had pulled out. My estimated sales that resulted from that ad? About $200. Yep, by placing that ad I lost $800!
Another right thing I did was invest in more education for myself. What did I need to learn? Marketing, marketing, marketing.
(5) Waiting for everything to be perfect
Running a business is a process. Your business is never finished. Your website is never finished. It will never be perfect so if youâ€™re waiting for perfection youâ€™ll be waiting an awfully long time.
Do the best you can do, do something youâ€™re proud of and then put it out into the world.
Rinse and repeat.
(6) Ignoring your own personal development
When business isnâ€™t going as planned itâ€™s easy to come up with a bunch of excuses.
â€œMy customers wonâ€™t pay a higher priceâ
â€œMy customers donâ€™t value what I doâ
â€œPeople expect my thing for freeâ
â€œI donâ€™t have the money to