Many entrepreneurs are self-taught, so it's no surprise they take a wrong turn from time to time.
While you can't predict every error you'll make, there are some errors that happen more often than others. Read on to learn five of the most common mistakes new entrepreneurs make so you can act now, rather than react later.
1) Trying to do too much at once
When you're just starting as a business owner, there is pressure to wear as many hats as possible in order to keep costs down. While taking on everything you can is commendable, it is not a good business strategy. Even when profit has yet to pick up, outsourcing and automating mundane tasks is necessary so you are able to focus on the roles and responsibilities you’re best at.
Here are a few ideas for outsourcing your work:
- Accounting: Leave the finances to professionals. Find a reliable bookkeeper and accountant who has experience working with entrepreneurs and new businesses.
- Research: Letting a virtual assistant take over the research aspect of any project can drastically improve your overall productivity.
- Editing: If you spend your day writing emails and pitches, like I do, you'll want to make sure you have someone look over your work.
- Scheduling: If much of your day is meetings and phone calls, you might be wasting valuable time setting them up. Use a virtual assistant to help keep your calendar in line.
- Customer support: Keeping your customers happy is important for reducing your churn rate (retaining customers). However, you don't need to have a full staff handling it. You can outsource it to a company such as Zendesk.
"In the end, a vision without the ability to execute it is probably a hallucination." --Steve Case, AOL co-founder
A great business is built with ideas and execution, not just the former. Letting the preparation take away from the execution can lead to failure. Planning what you want to do is just step one. Making sure your ideas are tied to action is how you turn a dream into a business.
You can do this by determining what your business goals are and working backward to deconstruct the optimal way to achieve them, in the form of a step-by-step plan (often called a business plan). Be sure that each step in the plan has a highly detailed deliverable so you know exactly what you need to complete to reach your goals.
As a new entrepreneur, you may think the only way to get and keep business is to charge less. However, by offering your services at less than market value, you create a heap of problems.
First, you're going to be stressed. When you need to make X amount of money to live comfortably, and you let clients haggle you down, meeting that number isn't going to happen. In turn, you'll have to work more than your normal hours, leaving less time for the necessities of life (e.g., sleep, exercise, healthy eating).
Second, not getting paid what you think you're worth can make you resent what you do. Chances are, you became an entrepreneur to pursue a passion. When you're not properly compensated for your work, it can lead to anger and frustration that you'll likely turn toward your profession rather than the problem.
Lastly, while you may be saving your clients money, you're likely costing yourself more. When you're not being paid enough, you have to find more work to supplement your income. You probably already know finding new clients is not always easy. The time you'll spend finding leads will drop your hourly rate even more. Stick to a fair price, and don't hesitate to say no to clients who only want cheap or discounted services.
4) Not investing in marketing
Marketing shouldn't be used to fix a business but rather to help it grow--think food versus medicine.
Investing in marketing is a common characteristic of successful companies, big and small. The reason these companies continue to make marketing a priority is they know what it will bring them in return--customers.
Take Apple for example. It creates some of the world's most widely used products, and the brand name is known around the world. Yet the company still spends hundreds of millions of dollars on marketing each year. Why? It understands the value of it. Regardless of whether you're a Fortune 500 company or a small startup, marketing has its place in every business strategy.
Start by researching your target market and then put together a marketing strategy that fits your budget.
5) Underestimating the value of networking
Being an entrepreneur can sometimes weave its way to a life of solitude. Self-employment shouldn't mean you neglect your professional (and personal) connections. Remember this: You are only as good as the network you build. Forgetting that can cost you all sorts of opportunities.
Putting friendship at the forefront is the best way to form solid business relationships--leave self-interest out of the equation. When done consistently and genuinely, the help, referrals, and advice will eventually come naturally.
Use the tools below to start building new business relationships today:
- Meetup.com: A great site for finding niche communities of people who share your interests (business and personal).
- Chamber of Commerce: One of the best organizations to join to network with other business owners in your community.
- Eventbrite: Find conferences happening in your area with Eventbrite, and use the opportunity to network with other attendees.