Budding entrepreneurs – fancy starting a business in 2017? If so, let’s start 2017 a bit differently; instead of looking into the future by predicting what’s going to be the trends in 2017, I think it’s a better idea to look back and learn NOT to make the same business mistakes that many entrepreneurs made last year.
Here are eight big mistakes entrepreneurs shouldn’t make this year. All can lead to failure or at the very least: failures that could have been avoided had the startup team planned more effectively, and took the time to listen and learn from those who knew better than them.
1. Failing/refusing to plan
I’m not talking about creating a bullet proof investor-style business plan that your bank or investors would expect. Maybe you’re starting a small business that doesn’t require you to go to such lengths. However, you must plan for success or suffer the inevitable failures caused by your own laziness.
Quite simply, you need to know who your customers are, where to find them, how much they’re willing to pay for your product or service, and finally: have the basic marketing worked out. And not just how you’ll market, but how much it’ll cost you.
2. Lacking focus on the big picture
You want to move your business to the next level. Then the next level beyond that. And so on. Don’t worry about things like how your Yellow Page spread will look a few months down the road (does anyone still use them?) Or the paper stock used for your business cards. These are small time decisions and worries that will curb your online business in its tracks.
As in the last point, focus on the customers and where the money’s going to come from. Without both, nobody’s going to give a lick about the background used on your social media profiles, or how pretty the vinyls are on your company SUV.
3. Ignoring the MONEY
Or worse, dreaming about all the money you’re going to make instead of nailing down the first two points mentioned. MONEY is your biggest concern, but not about how you’re going to go for a swim in your massive money vault like Scrooge McDuck every morning starting a year from now!
Know how much money you’ve got, how fast you are and are going to burn through it, and where you can find more (ie., investors) if you run out or something comes up all of a sudden (ie., lawsuits, bills, etc.)
4. Pricing products too low
This one is utter insanity. Undervaluing your product to get it out to market is a big mistake. Worse, undervaluing it when sales are rushing in like gangbusters, thinking that upping the price point will halt those sales in their tracks is utter sacrilege! Better to overvalue and have to pivot in a month or two, than to not make a profit and be forced to go out of business.
This is business 101. Pricing is psychological. Sometimes crappy products sell for a lot of money. And your product isn’t even crappy, right? So don’t undervalue it. Learn more about the psychology behind setting price points for your products and remember to always harness the power of the number 9!
5. Thinking bad reviews about your service are just par-the-course
Nobody should have to tell you about the value placed by customers on the service they receive – before, during and after the sale. Usually, the biggest customer service blunders happen when the customer becomes unhappy and voices their issue – only to get stifled by a bad CSR or owner with too much arrogance for their own good.
Remember that your customers are everything. Without them, your business’s failure is imminent. Give them whatever they need to be happy with your product or service, without being a patsy of course!
6. Being over confident (ie., ignoring sage advice from mentors and experts)
Listen… You don’t know everything. And even those whose advice you covet most don’t know everything; regardless of how highly regarded they are. You need to listen and not cover your ears saying “la, la, la, la!” until they walk away every time someone tries to help.
Therefore, when someone who’s been where you are already tells you that you’re doing something wrong – that you’re missing a key element – that you’re going down the wrong path – that the market you’re trying to enter has dished out its last sawbuck – you need to listen.
You might not follow their advice, heck some of the greatest achievements have been born from those who ignored their naysayers. But, you have to listen and weigh whatever advice/criticisms they’re giving – very carefully!
7. Over-advertising ($$$)
Spreading your advertising budget too thin is a key ingredient to business disaster. Unless you have a million dollar app being backed by investors, your advertising budget has to match your current profits. Period.
There’s more to developing an ad budget than a simple 10 or 15% of current or projected sales. Follow this formula and don’t overstep your reach!
8. Emulating the competition
We’ve all heard it a million times. “There’s no need to reinvent the wheel.” While this is true, just because something’s working really well, or appears to be working well, for someone else doesn’t mean it’s going to work for you. Worse, maybe your competitor, who was successful for a long time, has started doing something really stupid lately such as lowering their prices way too low, or offering a buy one get one free when their margins won’t cover such a deal.
Only copy something that someone else is doing after you’ve performed an exhaustive analysis, taking all potential pitfalls into account. There are graveyards full of businesses who tried to usurp the need for creativity by copying another business’s bad ideas.
Recommended Reading
Check out the following links for even more helpful advice on starting your own successful business. Remember “The Devil’s in the details.” You have to study them in order to avoid inviting Lucifer and his legions into your business: