5 Most Common Mistakes Entrepreneurs Make When Starting A Business
This article will present the 5 most common mistakes that new entrepreneurs or wanna-be entrepreneurs make, that causes their businesses to fail. This applies to all industries, not just online businesses.
Treating your business like a magical money vending machine
Seriously. I see it all time. Most people who say that they want to start and build a new business aren’t actually looking for that at all. Instead they just want a magical money vending machine, where if they put $100 in they’ll get $200 back. But funnily enough, it doesn’t quite work that way.
Here’s how it actually works: Most businesses take at least six months to turn a profit. Six months! Why on Earth would it take so long you might ask. If you want money right away, I’m sorry, but that’s extremely unlikely to happen because, you see, a business isn’t some ambiguous thing that you do to “make money”
A successful business is when you do these three things well:
- You find or create great products or services to sell
- You put those products in front of the right people
- You give those people a great reason to buy
And there is a learning curve at getting good at these three things. Some people are a genius at doing them naturally, but like most things in life, the majority of us will have to learn through education and experience.
If you choose to live in a fairytale land where you have unrealistic expectations of overnight success then you can expect a failure rate of 99.9%
Falling for the shiny object syndrome
I know that this is a mistake that I’ve definitely made when I was first starting out as an entrepreneur.
- “I got a great idea. I’m going to start a clothing line. It’s going to be amazing”
- “What’s this starting a social media agency? Cool. I’m gonna start that too”
If you fall for shiny object syndrome, then all of your business ventures are almost certainly going to fail and to figure out why we just need to do some simple quick maths.
You’ve only got 24 hours in a day. Most of you watching will spend at least eight hours at work. And then you’ll spend at least one hour commuting and preparing for work after taking out eight hours for sleep that leaves you with just seven hours a day, which is not much time. But those seven hours you’ve got to cook, clean, help out your friends and family, manage your life plus have some down time as well, so that you don’t go insane and burn out.
Most people will realistically be left with 1 to 2 hours each workday to work on their new business and obviously with weekends you have far more time. Perhaps you were very disciplined and you’re willing to work eight hours a day. That means for most people you are likely to have around 20 to 25 hours a week at most on average to work on your new business venture.
Now consider this one of the business models that we recommend at SaleSource is opening an online store and then drop shipping products in it (via the Shopify platform). Usually I recommend that most new store owners devote at least 15 to 20 hours a week on their new business and that’s actually less time than most other business models, because of the fact that this one is semi-automated. However, it is worth mentioning at this point, that there is no substitute for hard work and dedication and you still need to conduct extensive shopify product research to find the very best products for your store.
So just think about it. If you are trying to start 2,3, 5 businesses you’ll literally run out of time to launch any of them. So pick one business and stick to it .
I recently received an email from one of my clients who was watching a video on Drop Shipping and taxes.
- “I almost don’t want to start a business anymore. I don’t even know if I should bother I hate taxes”
I hate taxes too, almost no business owner I know like thinking about taxes and one of the benefits when I was working a regular job was that I literally didn’t have to give a single thought to my taxes. Here in the UK, if you work a normal 9-5 job thanks to a system called P-A-Y-E, the government will take taxes out of your paycheck for you.
So by giving up my job and becoming an entrepreneur – handling my tax returns is now a new burden that I have. But you know what else I have, I now have the freedom that I am no longer chain to my desk job. Thanks to passive income I built for my businesses and since I now don’t have to exchange my time for money – I’m fulfilling my life dream of traveling around the world in business class and first class, Since I no longer have a salary cap on my income. Sure, I have to spend one to two days a year working with my accountants to make sure that my taxes are in order. But you know what? I think that’s a sacrifice I’m willing to make.
They think that their business is awesome, but their customers do not
This here was an email that I received from my client recently. He had just started the new business venture and online Drop Shipping Store and wanted me to give him feedback now when I saw that the URL to his store literally had his name in it, I realised that his store was clearly not set up to serve customers. It was set up to serve himself and as I reviewed the store, that’s exactly what I found.
The store was and still is to this day simply a collection of random products that the client in question likes and is interested in. This store is admittedly one of the more interesting stores I’ve ever seen. It was ugly then and it’s just as ugly now, but I’m not surprised as he built the store with himself in mind and that makes it much harder to be objective.
Why? Because most of you reading, including myself, suffer from illusory superiority – a cognitive bias that makes us think we are superior to others. Another name for it is the Lake Wobegon effect – named after the fictional Lake Wobegon town where it said that all the women are strong all the men are good-looking and all of the children are above average. Uou may have noticed that almost everyone you meet will say that they are an incredible driver and that everyone else is terrible. So, if you’ve ever wondered why everyone thinks this – now you know.
Unfortunately, the Lake Wobegon effect means that it’s actually quite difficult for us to be truly objective about the things that we create and do, which is why analytical data can help us.
They “eat McDonald’s”
A few years ago my friends started a new successful business venture bee keeping and honey. They are an awesome example of a peer of millennials who hated their 9 to 5 life and took action to change it. However, they recently been suffering a lot from having no energy and exhaustion and we’re struggling to keep up in their business. To my surpise I discovered that they eat McDonald’s almost on daily basis.
They said: “ yeah, we eat it because we don’t have enough time to cook” – No wonder you have no energy. I get it, as a new entrepreneur you have limited time, so you’ve got to cut some corners to save time, but don’t do it buying McDonald’s.
For breakfast each day, I have the same thing oatmeal yogurt and coffee. For lunch I have more coffee yogurt, some vegetarian sausages and almonds. And then for dinner, I have a lots of vegetables that I chop up and thrown into an oven for 30 minutes along with some more vegetarian sausages plus some snacks, of course. And guess what, not only is the food healthier and cheaper than McDonald’s but it’s faster for me to prepare this than to go through a drive-through to get a Big Mac.
In the beginning your business relies on you and in the future you’ll build up passive income and be able to take breaks with less consequences, but at the start you can’t just cool and sick eat well and exercise – Don’t cut Corners with your health.