What is the most common mistake entrepreneurs make that I should avoid?
I know there are a lot of entrepreneurs and business people here and I am sure many have great advice. I am fairly new to being a business owner and have already made a bunch of mistakes. I think the biggest challenge I have faced is trying to do too much and not staying focused on my core business. I would like to avoid making other mistakes and am curious what people have learned from some of the mistakes they have made or see others making. Thank you.
You need to stick to your core business until you are well established. Build a realistic budget including every expense you can think of, add a line for savings to cover surprises; check out shared service resources before hiring; get feedback regularly from your customers and prospects to understand what they really need, not what you think you want to sell. Good luck.
This is really the essential question, for what I have found is you eventually come to a fork in the road…..do you do everything by yourself, or do you invest in outside expertise. I am at a place where I know my limits…however, how does one find that perfect person or team that you can trust will take your business to the highest level possible? This is where I am stuck, after already have had a business many years ago. I actually have done my research, made samples, revised, etc. and have a business plan. I know I do not nor am I the best to sell this product which is realistically, fills a need in an industry that is huge. I just don't know how to market and sell it myself, and who to trust will do that. Many people have wanted to get involved, because the numbers are staggering, but how do I know who will actually perform. Because there is so much money to be made, I am willing to give a very fair part of my profits to that person/team…how does one know how to find that person is the challenge, as marketing requires sales performance on all platforms.
Finding the RIGHT people to help to grow is the hardest part for me.
Zoe - Best of luck with the art gallery. I'm not going to say much else here because all my mosaicHUB colleagues covered your question very well. My answer would have been relatively similar to David Reimherr or Wayne Bidelman. But all comments appear relevant and helpful. So, best of luck and let us know when you are open. I'm in the NYC area and would love to see what you do. Rich Veltre CPA
I would say that the most common mistake of entrepreneurs, especially in early stages, is to focus too much on the product, and not enough on the customer. Entrepreneurs usually start a business out of a passion or experience; therefore they do something they know. The product they develop is a result of their knowledge. However, a product should be what people want to buy. The Lean Startup is good tool to have handy in order to continually assess the relevance of the product/market fit.
As a good friend of mine commented recently on one of my LinkedIn posts, if your product is not market fit, you don't have a business.
My advice is to know the business well. I have an MBA and have worked for nearly 50 years. The worse thing a new business owner can do is start a business they know nothing about. If this is the case, you need to get help fast and learn, learn, learn. You may need a consultant if you are over your head. I hope this helps and I wish you well.
Develop your plan and your vision and stay true to it. As you go forward, you may need to tweak it here and there, but don't be easily swayed by ideas or others that will pull you away from your goal.
Indigestion ! I think you already are on to it with not getting distracted from your core business.....we all tend to get driven by starvation (the notion that if you don't get your start up off the ground quickly and make it profitable - you'll starve to death :-)) and that can make us over consume, chase shiny things in all directions when focus and finding a niche is the key to success.
In my experience (ie in hindsight from many start ups) you do need to let your mind wander vs be disciplined though. I'd argue more for being agile - quickly iterate through all these so called opportunities and good ideas and throw out the one's that don't hunt as early and often as possible. Let's face it - if its simply an exercise in focus and execution - then its a known problem - solution set that other people are already doing. You have to believe you are envisioning something that doesn't yet exist or the market doesn't understand will solve their compelling problem to be a successful start up.
That means having a general idea of your business roadmap - but like fishing - you weave your way down the river, throw out all kinds of line, change the lures and bait often and see when you start catching something...then its time to stick to the program and focus.
The other metaphor I liken a start up to is the 2 minute drill in football. With time being the essence the temptation is rush all the plays or to go for it all on a Hail Mary pass when its best to stick to plays that have been working for you in the game and keep moving the chains ......that usually gets you to a spot in the red zone with plenty of time, options and opportunity to score.
I guess a sales person would argue the same but in a more succinct bottom line manner :-) (Something like - spend as little time as possible getting a quick 'yes' or 'no' answer from as many clients as you can....the 'maybes' will kill you...when you start getting repeat yes answers - rinse, wash and repeat that question and answer process ! )
All excellent responses.
I would reinforce the response about obtaining ideas from professionals and/or other business owners.
Don't make all your decisions yourself without ideas of these others.
I have seen small businesses fail because of this.
As a business and marketing strategist who coaches business owners, it is predictable as to what I would say. However, I do what I do because of the reality of business ownership.
There are 2 statistically proven mistakes business owners make. The first is the lack of a plan This does not have to be big and formal, and not what would be required for outside investors. This would be a one page (spreadsheet) strategic road map just for internal purposes. If done correctly, it aligns longer term personal goals with the needed short term business goals and required activities to reach them. You state struggling with doing too much and not staying focused. Only with a correctly determine strategic road map will you have what you need to define the right things to do at the right time.
The second biggest mistake is that the business owner does not realize that they have weaknesses or they know they do but they fail to do the right things about them. You wrote this question, so the former is not reality in your case. Getting mentor-type advice, which is what you are doing, can be extremely valuable. But only with the regular, consistent interaction with a coach (to be a type of business "partner") will you truly stay on course and be highly successful. And I say this not because I am a coach but because I have experienced it from the other side. There is nothing more powerful.
Most common mistake: No marketing or misguided/ineffective marketing (same as no marketing).
Before you can expect customers to come and pay you money you need to tell your available market (1) who/where you are, (2) what product/service you provide, and (3) what makes you DIFFERENT than all the others who do what you do.
Al Shultz alshultz.com/
A great question. In fact, I wish more entrepreneurs asked it early in their endeavours. Perhaps then we would have more successful entrepreneurs.
Your situation is similar to every entrepreneur. There are so many things that need to get done. Which one should I do now?
My answer is to take a day or two out of the business and write a business plan. Now by a business plan I do not mean a 200 page document. Just one as complicated as the business will do. For most businesses about 10 pages will suffice. Besides the one page executive summary, the plan comprises 3 pages each on; product, marketing, and the financials. (Email me if you would like a template).
If you draft a plan, you'll discover there are things you don't know about your business, and therefore, you need to investigate these.
Once you have a completed plan, your priorities become self-evident. Why? Because you have documented your thoughts about your business, which brings clarity to your situation. If, however, your priorities are not self-evident I suggest you consider appointing a business mentor / coach because you are too close to the hurly burly of your business and you would benefit from some objectivity.
Let me know if I can help.
Best wishes with your endeavours - it's a wonderful experience!
It is better to avoid most of over head expenses for a period of time to be able to run the business for longtime , of course it depends on your sales & expenses , you may score high records of sale which means ability to survive longer , any how keep in mind to lowest any expenses for limited period of time . all the best .
Zoe, much of the experience you get from having your own business is learning from the mistakes you make. There are, however, things you can do to keep from failing completely.
1. Develop your mindset for being a business owner. You probably decided to start your business because of a product or service you are passionate about. Being focused on this puts you in a technical mindset. The way you build and run your business puts you in the owner/operator mindset. This mindset is what will make you successful long term.
2. Have a plan that focuses on how you will run your business and how you will market it. Focusing on the operation will keep you from getting off track and marketing will keep your energy on revenue producing activity. Without this type of focus, it's too easy to drift and eventually lose track of what you are doing.
3. Know your financials. Depending on where you are, you must understand what it's costing you and when additional investments are prudent. It usually takes longer to get a business financially stable then most people realize. The primary reason for a business is to make money. Without being able to make money, you have an expensive hobby.
4. Be able to clearly identify your best customer. Not everyone you know needs or wants your product or service. Minimize the wasted time and money you spend marekting to people who are not your best potential clients.
5. Always be on the look out for professional help. At first, you may not be able to afford it but eventually you will and you should already know who to contact when the time comes. You should also be building a circle of people who share your desire for success and will support your journey.
Here are 2 resources that will further help you understand the important things to stay focused on:
Discipline yourself to do I business plan....Go to beResource.com to get started and it will help you stay on track.... Go to a Score counselor near you to help be a mentor for you
Most entrepreneurs fail because they have not developed a business plan. Even more importantly they haven't even done a break-even analysis for their first year of operations. The challenge for every entrepreneur is to be able to prove to themselves that they can sell enough of whatever they are selling to cover their start-up costs.
Zoe, I did 2 blog posts that you ought to read - "6 DON'T's When Starting Your Business" -
http://bit.ly/1eZ3bkk and "6 More..." - http://bit.ly/1WoRrJi. They provide a really good checklist of things to avoid. Good luck with your new venture!
"The Entrepreneur's Yoda"
Zoe, as a SCORE mentor, counselor and workshop instructor for those who are thinking about starting their own business, or are experiencing difficulties with the business they own, I can say (as others have in their responses to you already) the greatest mistake is not having a well thought out business plan.
Without a plan, your actions and behaviors will drift off target and you will attempt to take on too many activities and tasks that are not critical to you growing your business. Part of the plan is as detailed a financial forecast as you can produce for at least 3 years. This will allow you to focus on what items are profitable, and what can be eliminated, or farmed out to a lower cost resource. The old saying "cash is king" should be top of mind as you grow your business, so you need to keep a sharp eye on the money 100% of the time.
SCORE is a not for profit organization that provide no charge (free) counseling to businesses like yours. There are hundreds of chapters in the US, each with dozens of high quality, highly successful and very experienced volunteer mentors at your disposal. Go to SCORE.org to find a chapter near you.
It's not all financial. My advice:
DON'T say yes to everyone! Two things can happen: a-you won't meet deadlines and make someone angry, and/or b-you'll be on time with everything but it won't be your best work.
DO occasionally do pro bono work, but only for non-profits. You'll get to do some great and fun things.
My view is that if you are doing to do it, you have to go All In., You can't go a little bit in to doing this. If you are not all the Way in, you can't do it. If you are trying to do it as a Hobby, you won't get to where you want to go. If you are Part of a Team, it might work, but in most cases it won't. Trying to do too Much is a Common Mistake as well. What are you REALLY good at? Stay focused on that, and either get help or Oustource things you are not very good at.
I'm an attorney who represents small businesses. One common mistake is a failure to get things in writing, either with partners or customers. It's annoying to pay to have good contracts drafted (I also run a small business and I understand the cost crunch), but it's even more annoying when people go back on their word or dispute terms you thought were clear, which is all too common. Like a lot of legal things, it's all about risk management.