According to the Bureau of Labor and Statistics, over one-fifth of small businesses fail within their first year. If your initial reaction upon hearing that information is panic, I want you to take a deep breath. It’s a scary statistic (for sure), but there’s a lot you can do to prevent yourself from becoming a part of that population, which is what we’ll be diving into today on the blog.
The truth is, most business owners don’t succeed because they make a string of mistakes that prevent them from making money and scaling. These mistakes are easy to avoid once you can spot them, and preventing them from happening in the first place is the absolute best way to ensure that you are on the path towards success.
Mistake #1: Starting a business for the wrong reasons.
Most CEOs start a business for two reasons: money and freedom. They think they’ll earn a lot of money very quickly, and that they’ll be able to do it on their own terms, as their own boss. While this is true once you reach a certain point in business, it would be silly to ignore the hard parts of entrepreneurship, like the risk, stress, and long hours. If your primary reason for starting a business is because you think it’s an easy ticket to fast money (and less work than a 9-5), you are unfortunately mistaken. This is when it’s time to really evaluate if entrepreneurship is the right decision for you. Are you prepared to wear all the hats in your business at first? Are you prepared to potentially not take home a profit for many months? Are you prepared to work harder than most standard employees work? If the answer isn’t a big YES, the mistake you’re making probably has less to do with your actual strategy and more to do with your expectations. Entering business ownership with reasonable expectations is essential in a) establishing the right mindset as a CEO and b) not getting frustrated and quitting right off the bat.
Mistake #2: Conducting poor market research.
Imagine going through all the work to launch a business, create a new product/service, develop strong marketing campaigns, and even spend money on advertising…only to later discover that what you’re selling isn’t something anybody really wants. This happens all the time, and it’s usually the result of neglecting market research. If you’re unfamiliar, market research is the process of gathering information about your target market and customers to help you determine the viability of your new service or product and get feedback from consumers about their interest in the product. Without market research, you have no way of knowing if your target customer is in the market for whatever is you’re launching. Be sure to conduct comprehensive market research across many individuals in your target audience to get the most accurate picture of how in-demand your product or service is. This way, when you launch, you’ll know with certainty that you won’t hear crickets since you already have established interest.
Mistake #3: Not having a solid plan.
It is absolutely crucial to write up a business plan that will allow you to stay consistent and on track towards your goals. It doesn’t need to be insanely detailed or 20 pages long, but it does need to lay out the foundation upon which you’re setting up your business. Ask yourself the following questions when writing up your business plan:
- What are my short-term goals? (Think days, weeks, and months.)
- What are my long-term goals? (Think 6+ months, 1 year, and 5 years from now.)
- Where do I see my business headed?
- What problem am I trying to solve?
You’re also going to want to think about your finances, competitors, strategy, marketing, and so on. A quick Google search will help you find a business plan outline or template that is right for you, so you can fill-in-the-blanks and not waste time drafting the shell of it.
Mistake #4: Trying to handle everything alone.
While it’s totally normal to wear many different hats as a first-time business owner (especially in the early stages), this doesn’t mean neglecting your mental health to “do it all”…because you can’t. It’s that simple and that frustrating. Trying to “do it all” is the fastest way to burn out! Instead, take advantage of the skills and knowledge that other professionals can offer, in both business and your personal life. If you hate writing and notice that your website isn’t converting well, maybe hiring a copywriter would take some of that stress off your plate while fixing the problem. Conversely, perhaps you have the business side of things all figured out, but you don’t have a moment of peace at home to get things done — could you potentially outsource childcare, cleaning, cooking? Or rely on a partner/good friend to help out? Remember — everyone needs help sometimes, and there is literally zero shame in reaching out and asking for it! I firmly stand by this and outsource tons of support in both my business and home life.
Mistake #5: Not understanding what you’re actually selling.
The service or product you’re selling isn’t what you’re REALLY selling. Think about it like this: when you buy a face cream, you’re not buying a face cream for the sake of putting cream on your face. You’re buying that face cream because it will make your skin more moisturized, more clear, less wrinkled, etc. And why do you care about those things? Because you want your face to look nice. When you purchase face cream, what you’re really buying is the promise that your face will look beautiful and youthful if you use it. So, take this approach when thinking about your own products and services. Understand your target customer’s desired outcome and figure out a way you can weave it into your marketing.
If you didn’t get the memo yet, starting a business is no small feat…but that doesn’t mean you won’t absolutely smash it. Avoid the above mistakes to the best of your ability, work hard, and stay consistent — you WILL see results.
And if you’re still stuck? That’s what I’m here for! As a business and marketing consultant, it’s my job to help you figure out a smart, strategic approach to your business that goes hand-in-hand with reaching your goals. Click here to learn more about booking a strategy session or joining my consulting waitlist.