Part 1: Mistakes To Avoid When Starting a Small Business
There are many mistakes to avoid when starting a small business. Heck, any sized business, depending on your aspirations. This topic may have been at the forefront of my brain as I have been re-watching The Dropout (the infamous Elizabeth Holmes) and WeCrashed (the also infamous Adam Neumann & Rebekah Paltrow).
All business brains involved had lofty ambitions and were uncannily incapable of seeing the forest for the trees despite a lot of experienced input decreeing that something wasn’t right. Something was amiss.
There is something to be said about forging your own path and not taking no for an answer when you believe wholeheartedly in what you are doing. But there is also a time to take stock of reality, and in both cases, they just didn’t seem to believe that ‘reality’ applied to them.
They were seemingly almost above or immune to the normal laws of physics and relativity. In their own unicorn bubble, if you like, which seems apt because the unicorn is a fantastical fabrication and their grip on reality was less than sure.
What about ‘normal’ business goals?
But for the rest of us with perhaps more modest intent? It all starts with a lightbulb moment. That moment when you say, “A-Ha!” And think that nothing can stop you with this brilliant idea. The enthusiasm is very real and may be difficult for others to tamp down if they think otherwise.
But making the bold and often life-affirming decision to start your own business, usually daunting for most, can be riddled with pitfalls and errors that may hinder your success before you ever get truly started.
Let’s take a look at some of the most common issues that can befuddle even the most well-intentioned entrepreneur aiming for a successful start-up.
So, you don’t have a business plan?
It’s not optional to have a business plan when it comes to starting your own business. Many start-ups make this critical error thinking that they should just get on with it and then lay out some concrete plans once the business takes off.
Wrong. You need a compass to guide you on your course. You need goals, strategy, plans for revenue, and the desired outline to generate that revenue. Will you be using face-to-face sales or an online marketing funnel? Are you B2B or B2C and how do you plan on networking? What margin and markup are needed to make a decent and feasible profit for your sales or service?
Your business plan is essential to keeping you on track as an entrepreneur and is also vital when talking to potential investors. They need to see some concrete forward planning and goal outlines to believe in you and your business before forking over the money you may need.
You’re just deciding to do what you love
This is one we hear time and time again:
“Do what you love and you’ll never work a day in your life again.”
This may be true if you excel at what you love to do. But make no mistake, just because you LOVE to do something doesn’t mean that you will be profitable from choosing to do it.
You may love to play the guitar, but you aren’t actually very good at it. Maybe you think you’re a budding Julia Child, but the reality is that your food is just about average, and opening a restaurant would be an unmitigated disaster with you at the helm of the kitchen as Head Chef. Perhaps you fancy yourself a fashionista with designs on becoming the next Balenciaga, but your passion for sewing and creating streetwear may leave a lot to be desired by the public.
The point here is to be realistic. If you love to do something and you’re really good at it, then by all means. However, just because you love to do something does not mean that you will be incredibly successful in a related business.
The lesson here is to start a business doing something you enjoy that you are ALSO GOOD AT. People will pay you for quality services and products which means profits.
Ignoring market research and the competition
If you fail to check out the competition in your area or desired market, chances are you will be caught unaware of others doing the exact same brilliant idea you are.
You need to know if there is a market for your entrepreneurial venture in your target market (and have you niched down to your target market 🤔 ???) before assuming you can launch your product or service with all of your enthusiasm only to flounder without interest.
It’s important to do market research to buoy your own beliefs about your business offer and ensure that there are people out there who think it’s worth paying for it the same way you do.
Secondly, are there others doing what you are aiming to do, but doing it brilliantly already? Would attempting to unseat their market share be out of reach or unattainable without serious financial investment? These are things you may have to consider before approaching a market with a successful competitor or two already established. It may be wiser to consider an alternative market.
Research what your competition is doing well, price points, and market saturation, and then decide if the challenge is accepted to continue.
There are many other aspects of starting a business that can contribute to its success or failure.
Next week we will look at another set of mistakes to avoid when starting a new business so that any budding entrepreneur can benefit and prosper!