As absolutely amazing working for yourself is, starting a new business isn’t for the faint of heart! There are so many moving parts you have to juggle and mistakes are an inevitable part of the journey. Fortunately, you can avoid prevalent business mistakes by learning from the millions of entrepreneurs who came before you. Before you even start down the journey of starting a business, it is important to be knowledgeable about the pitfalls and have a plan to avoid them before it’s too late.
If you’re new to entrepreneurship or running a small business, check out our tips below to avoid these 10 most common business mistakes:
Business Mistake #1: Not defining your niche target market
Meredith Hill put it best: “If you’re speaking to everyone, you’re speaking to no one.” Start by creating a buyer persona to narrow down the focus and will help you:
Understand who you should be talking to and how. (Check out our ad targeting blog to show how we build our audience for Facebook ads.)
Craft content that speaks directly to your target market and their pain points.
Build an offering that resonates with your audience.
It’s easy to say, well, anyone can buy my $45 handcrafted candles. Technically that is true, but WILL everyone buy a pricey candle? Maybe try narrowing down your segmentation to focus your target market on older women with discretionary income that enjoy essential oils and self care and see what results you get. You can always expand your target market to increase reach but you’ll waste a lot of time and money going too broad at first.
Business Mistake #2: Not laying the groundwork
Did you know 45% of the people who click on an article will leave within the first 15 seconds and 60% of them won’t return? We have short attention spans and will find what they need elsewhere if you don’t wow them right away.
Think of your website as the backbone to your business. Without a kick ass website, your business is losing the purchase. Before you start marketing of any kind, build a website if you don’t have one already or take a good look at what you currently have. You need to get the basics figured out so the rest of your message is consistent and clear. Here are some questions to ask yourself:
Is your logo professional looking?
What is my value proposition and tone of voice (educational, casual, formal)?
Is my website eye catching, easy to navigate, and easy to shop?
Has SEO been done on your website to use keywords that your target market actually searches for?
Do I have any broken links?
How does my website look on mobile devices?
Is the pagespeed 4 seconds or under?
Are my images professional and represent the brand?
Can your customers find you on social media?
If you aren’t sure, ask a colleague, family member, or mentor for their unbiased opinion. An outside perspective is helpful to make sure you lay the website groundwork so your business succeeds.
Business Mistake #3: Not separating business from personal
A business bank account and business credit card is a must to keep your income and expenses separate from your personal account. Things like your website hosting and domain cost, marketing expenses, overhead costs, equipment purchases, employee salaries, etc. should be placed on your business account. This not only makes it much easier to file taxes (trust us!), but helps you clearly see your business’s profitability. Plus, if you ever want to sell your business down the line, separated finances make it much easier to find a buyer.
Business Mistake #4: Spending too much money in the beginning
Do you really need the biggest and best social media management platforms, home office supplies, marketing automation, personal assistant, or expensive certifications when you first start your business? Probably not. Keep your expenses low by starting small. You might have to settle on something that is not exactly what you had wanted, but you’ll avoid the heaps of debt while building the brand. And don’t worry, you can always upgrade to Marketo and Salesforce once your business hits its stride.
Business Mistake #5: Not spending enough money
The saying, “you have to spend money to make money,” is usually true. Once you’ve confirmed you’re not making business mistakes 1 - 4, you’ll need some kind of marketing budget to start attracting customers. You can price shop, hire marketing consultants instead of in-house employees or a marketing agency, and negotiate costs, but know that you’ll need to spend a little money to move the needle. Word of mouth only gets you so far. Keep in mind the market leaders that we’ve worked with are spending $150,000+ a month on Google ads alone. You don’t need a big budget to take a piece of the pie, just the experience and a strategy on how to do it.
Business Mistake #6: Not knowing your worth
Think about the value that your products or services bring to your customers, and don’t be afraid to charge for it. You might be more expensive than your competitors and that’s okay. Don’t set the precedent of slashing your prices because you’re unsure if people will pay what you think you’re worth. The right customer understands your value and is willing to pay it. Think of all the years of experience, certifications earned, podcasts listened to, industry events attended, time put into your R&D, platform costs. You deserve to charge what you’re worth.
Business Mistake #7: Not setting goals
Many business owners don’t bother setting goals for their business or themselves as a Founder. I mean, who actually has the free time? Or sometimes they will set huge, unrealistic goals and become discouraged when they don’t achieve them or see the outcome they had anticipated. Big goals are great, but you’ve got to break them down so you can get a win or two immediately to stay motivated. When in doubt, use SMART goals and start small at first. Is your end goal to sell 1,000 of your products? Try a SMART goal like this:
Specific - I want to sell more of my leopard print, faux leather designer handbag because it is not selling as fast as the other patterns.
Measureable - I want to sell 1,000 leopard print handbags a week. I will provide a promo code for 10% off so I can measure the sales generated.
Achievable - I sell more than 1,000 of my other patterns so I know it’s possible to increase purchases on the leopard print too.
Realistic - I normally sell 800 leopard print handbags a week so I believe selling 1,000 is doable.
Here we were able to clearly set a goal, it was achievable, and we gave ourselves a grace period to achieve it. Way better and more descriptive, right?
Business Mistake #8: Marketing to your customers the wrong way
This is why creating a buyer persona is so critical! You need to know where your ideal customers hang out online (Facebook, Instagram, Pinterest, TikTok, Clubhouse, Snapchat, podcasts - they all have different audiences) , the types of content they prefer (videos, educational, podcasts, images, emails), and what makes them tick (pain points, desires, career goals). Otherwise, you’re wasting your time and money marketing to people who aren’t listening.
Business Mistake #9: Trying to do everything yourself
Say you run a retail shop and don’t know anything about accounting, it’s probably best to leave that to the experts. You’re doing yourself a disservice if you try to do everything alone, so outsource high-value tasks, like bookkeeping or legal representation, to the pros. Ask another Founder who they use, find a consultant (they are usually less expensive than an agency or firm because of less overhead costs), or check out outsourcing websites like Upwork or Freelancer.
Business Mistake #10: Budgeting incorrectly
Every business needs to have a budget and stick to it to insure they stay profitable. If you budget $400 for a new printer, don’t spend more than $400. If you check Amazon often or shop used, chances are you can find a great deal.
Tax time can be especially hard for entrepreneurs who end up owing thousands of dollars they didn’t plan for. It’s a good idea to talk to a CPA to determine your tax bracket and take that percentage out of your earnings each month to hold for tax time. But don’t touch it! Trust me, it’s tempting to want to tap into that big pile of money sitting there - but don’t.
The bottom line
Mistakes in business happen. Every entrepreneur and business owner has made some kind of mistake and learned from it. But with some planning and a bit of work upfront, you can avoid these 10 business mistakes to keep your business healthy and afloat.
Need some marketing help? We’re here for ya! Contact us today for a free quote on marketing consulting to find the best tactics for your business!