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.
I would say that the most common mistake is not planning and budgeting correctly. You need a crystal clear plan in place before you get going so you can be zeroed in and focused on exactly what will make you successful. I would also say that cutting your rates at the beginning disabling your ability to scale and grow correctly is also a very common (and super dangerous) mistake many people make. So definitely do your research on what you should charge for your services and position yourself in the middle with the goal to increase your rates over time, just don't be on the low end or you will be spinning your wheels. Best of luck!
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:
Congratulation Zoe on taking the journey of running your own business. Don't make the mistake on trying to avoid mistakes. They are part of the journey, expect them and embrace them with lessons learn. Any new business will have its own challenge to overcome. Focus on your strength in producing an artistic environment and seek professional help for the rest. No list of mistakes to avoid will help because they will come anyway. But how you will build the business will make the different. Professional help for growth will help you for that. Such an investment is always rewarding if done well. It is always about the cost but the value you will see for your ROI.
Good luck for the new venture and read the book EMyth of Michael Gerber because you go further.
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.
The most common mistake I see is trying to do everything yourself to save money.
The second is not getting professional help before it is too late.
Most small business owners are really great when it comes to what they do. They can share their passion and excitement. But when it comes to other aspects of running a business, here is where the failures begin. This is especially true in marketing and financials. Do not wait until it is too late to be helped. Spending now will help you prevent spending a lot later or keep you from going out of business.
I have owned and operated my own business since 1982 and without question, the biggest mistake I made was to allow an individual client to become more than 25% of my business. This mistake almost put me out of business (and it took me two years to recover.) Violate this principle and you will eventually pay dearly for it. But on a positive note, I do wish you the best of success in your venture!
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.
One of the biggest mistakes new entrepreneurs make is taking advice from those not qualified to give it. (family, friends, etc) Only take advice from those that have had success in the area you are focused on. Leave your "employee" thinking behind and develop your entrepreneurial mindset. Much success Zoe!
1) They don't do the sales behaviors necessary to get the business/backing/network they imagine.
2) They do not invest in personal/team training and/or a panel of trusted professional advisors to fill knowledge gaps, instill accountability and create efficient, productive processes and procedures from the start.
3) They greatly underestimate how much freaking hard work is required to succeed.
Mistake #1: Not having a plan that accounts for and monitors cashflow.
Mistake #2: Not understanding and resourcing the marketing & sales function.
One way to stay focused on the right things is to prioritize on what is going to bring in the money. Many entrepreneurs make the mistake of spending all their time creating the best widget or service that they can - and not spending enough time on the sales and marketing end. Sales Drive the Business Bus. And - most entrepreneurs on in the business to make money. So - prioritize your time and effort on the tasks that actually make you money.
I am a business strategist and help entrepreneurs create effective systems, so that they can focus on the tasks that will bring in the money. I help them decide what tasks to delete, delay, diminish and delegate. Your situation is right up my alley.
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.
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.
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!
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/
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.
One of the primary mistakes made by new business is having too much overhead. Running as lean as possible, avoiding unnecessary expenditures, will enable you to survive, regardless of what happens.
Hi Zoe. Operating an art gallery is a dynamic adventure that indeed can be very rewarding. One big mistake other gallery owners have made is not focusing enough on sales revenue and building relationships. High cash flow covers a multiple of other shortcomings. Your success will be determined by how strong you build relationships with art collectors and artists you choose to represent.
Poor research in to the project they were going to sort, its viability and the true capital
outlay they need to set up; including rational over-drafts and more to the point interest
and charges being accrued on the over-draft. That is to say operating overheads as
office space, rent/rates (often overlooked) and services such as telephone, stationery
with other "invisibles"
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.