Working for a business and starting your own are vastly different experiences; some people feel that because they have a professional background, they can seamlessly transition into being an entrepreneur.
Launching a business and building a sustainable one is not one in the same. Even if you launch a business, you need to have the right mindset, resources, and abilities to keep it going.
To help you get a head start, here are five common business mistakes entrepreneurs make — and how to avoid them.
1. Quitting Their 9-to-5 Too Early
No one starts a business because they don’t want to become financially independent. It’s what keeps you constantly Googling terms like “how to grow my business” and trying new marketing efforts.
But rapid scaling can be deceiving.
In addition to recouping the initial capital you invest into your brand, you also have to project future costs and how they may change. For example, if your business nearly doubled in size in a year, would you be able to financially sustain it?
Quitting their job (working for someone else) after their first taste of independent success can be one of the biggest mistakes entrepreneurs make. In order for a business to truly be successful, you need a reliable cash flow and capital.
The more your business grows, the more it costs to run. There will always be a trade-off between take-home profit and operating costs.
Without a steady income, you could run into trouble early in the game. When your small business starts gaining momentum, hold off on sending your boss your two-weeks’ notice.
We are not saying to cling on to your 9-5 (We want you to be able to quit and would throw a freedom party for you if we could!) All we are saying is to make sure you have thought the logistics through before you make the final decision to walk away. You can read more about how you can prepare to “fire your boss”, click here.
2. Lacking Focus
You may get so excited at the prospect of making money online that you fail to narrow your niche early in the game. Common e-commerce ideas, like graphic t-shirts, do not work without a clearly defined focus. In many cases, the smaller your market, the better.
This is because you can never make effective sales when you attempt to please everyone. Products that cater to the masses come off as generic and boring online. A small business in particular must enter the marketplace with a distinct brand and clear value proposition.
For example, imagine a small business that’s going to sell blenders. It wouldn’t be effective to market to “anyone who likes smoothies.” Is your product small and compact, ideal for fitness enthusiasts? Could it be catered toward parents who cook a lot, or people who are new to health and looking for easy ways to prepare versatile meals?
Focus is everything in business. Take the time to develop a buyer’s persona (also known as a consumer avatar). This will help you know exactly who your product is for, what problems it solves and what type of marketing will be most effective.
3. Not Protecting Yourself
We know it’s a hassle to go through the never-ending paperwork, but trust us — you want to protect your business as soon as possible. Trademark your brand’s name, logo, marketing slogan, etc.
Register as an LLC to ensure your personal assets are separate from any revenue your business generates.
The worst thing you can do is not research your business idea and wind up getting a cease and desist after getting some traction. Make sure that your brand is 100% unique, then take the necessary measures to protect it.
In addition to legal measures, make sure you exercise caution about who you share your ideas with. Unless your business is registered and ready to go, don’t spill all your best ideas and goals with people who could potentially steal them.
4. Competing Rather Than Collaborating
Don’t look at the competition as your enemy. They may be more established, but that doesn’t mean there isn’t room for you in the industry, too. One of the first things we recommend when researching how to start a business is closely analyzing your competitors.
What do they do right? How can you learn from this?
What would you do differently? How can you incorporate this into your value proposition?
Failure to research and seek out opportunities early in your entrepreneurial career can lead to many other business mistakes down the line. Contrary to what you may think, lots of businesses do not get where they are on their own.
Small business owners especially can grow by looking for valuable partnerships and collaborative opportunities.
5. Assuming Entrepreneurship Is for Everyone
One of the most disheartening things that can happen to an entrepreneur is hearing their idea won’t work. You may excitedly announce to your friends and family that you’re going to start a business, only to be met with skepticism.
There will be people who tell you not to get your hopes up. They’ll tell you the market is too crowded. They’ll tell you that you probably won’t make it.
Sometimes they’re right.
The first small business you try to run will likely not make you a major profit. This is the reality for most aspiring business owners today. But that doesn’t mean you can never find success.
There will be setbacks and growing pains. The road to financial freedom as an entrepreneur is not always smooth — but finally reaching your goals feels better than your wildest dreams. It’s meaningful not only because you did it but because your hard work made it happen.
There are many mistakes that an entrepreneur will make throughout the life of their business. Mistakes are a part of the process because learning from them results in growth. There are, however, many advantages to learning from someone else's mistakes as well. Avoiding the mistakes above will save you time and headaches associated with your business and allow you to move forward and grow with less resistance.
Be patient with yourself and your business. Take the time learn from other business owners and other companies, as a whole. The beauty of modern commercialism is that you have in-depth access to brands' marketing efforts and branding. You can read reviews from customers, see what people loved and identify needs your future business could fill.
The more you know prior to launch, the greater chance your business has at achieving its objective. Then dive in. Do not let the criticism and fears of others hold you back. As long as you know your reason for not giving up, you can stay motivated and optimistic for what’s to come.
Would you like some extra support as you get started? Check out our community, The Blend. There are many people that are willing to help. All you have to do is ask!