Like many new entrepreneurs, I made a lot of dumb mistakes when I started my business.
I worked too long hours. I neglected my family. I spent too much time on stuff that didn’t matter.
I had many ups and downs in those early months. Although I had done a lot of preparation, there are certain lessons you can only learn through doing it for yourself.
For example, I didn’t give myself enough time after I quit my previous 9-to-5 job to get my new business set up. I went straight from my old job right into my new job.
I put boxes down and two years later, I’m embarrassed to admit that a few of them are sitting in the same places. I could have used more time to get ready.
When I was in college, I remember visiting an eccentric English professor during his office hours. I asked him about the huge mound of boxes, papers and files which covered most of the floor space. “I set them down when I arrived here 16 years ago and they’ve been here ever since,” he said. Now I understand.
Although I had done a fair amount of advance planning before venturing out on my own, there were many lessons I learned that you can’t absorb from books or endless research. Some of these lessons will only come from doing it for yourself. Trust me on this.
So if you are an entrepreneur or you’re thinking about becoming one, I have some advice for you.
Here are 5 very common dumb mistakes made by new businesses:
1. Focusing Too Much on Profit
This may seem counter-intuitive, but some businesses focus too much on extracting profit from everything they do. Instead, they should focus on providing value for others, even if there’s no promise of return.
In addition, every business needs to give away something for free. There’s a reason Baskin-Robbins gives away free tastes of their ice cream to anyone who walks into their stores. That’s because it works. By showing more people what you offer, you will earn more clients and customers who arrive already convinced you are worth whatever you charge.
2. Not Building your Minimum Viable Audience First
Every new business needs a Minimum Viable Audience (MVA), which is the bare minimum audience of potential customers that you need to be able to support your business. The Minimum Viable Audience is a concept adapted from the Lean Startup methodology of creating a Minimum Viable Product (MVP).
On the day I opened the doors to my new law practice, I had a minimum viable audience (MVA), because I had spent 2-3 years focused on building loyal clients and referral partners. That’s the real advantage of working in the same line of work as your new business.
3. Forgetting About the Short Term
A lot of entrepreneurs are dreamers. They are crazy enough to leave behind the security of a job to embark on the dream of working for themselves.
As a result, a lot of small business owners spend so much time focusing on building their long-term dream business, they don’t spend enough effort on short term priorities such as cash flow and getting the next client tomorrow.
If you ignore the short term revenue needs for your business, you’ll never get to achieving your long-term dreams because you’ll go bankrupt.
4. Not Educating Yourself
Most entrepreneurs I know are also voracious readers. They are always seeking out new ideas by reading books, magazines, and blogs, and listening to podcasts.
I am always reading books aimed at helping me to improve my knowledge and skills. Some of the best books aimed at entrepreneurs I read in my first two years as an entrepreneur include The Lean Startup by Eric Ries, Drive by Dan Pink, and Book Yourself Solid by Michael Port.
5. Not Spending Enough Time on Relationships
One of the biggest mistakes I see entrepreneurs make is not spending enough time and energy on nurturing relationships that can help their business.
They spend dozens of hours serving clients or marketing themselves or wasting time on social media, but not enough time nurturing relationships with people who can really help their business grow.
I give it away for free even though I may never make a dime off of it for the reason I explained in Lesson #1 – because someone might find value in it, and because if you do good things for others, the universe will repay you. And that is enough reward in itself.
What tips do you have for avoiding mistakes with a new small business? I’d love to hear your ideas in the comments.
Once you have done your planning and get you business off the ground it’s time to start growing your new business. In this article John will show you How to promote your business and promote yourself by using your blog for networking.
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Author: John Corcoran
John Corcoran is an attorney and former Writer in the Clinton White House, and founder of SmartBusinessRevolution.com. You can download his free, 52-page ebook, How to Build Income in 14 Days by Building Relationships with Influencers, Even if you Hate Networking