Classic Mistakes Novice Entrepreneurs Make
It’s exciting to see so many businesses getting started these days.
Technology has made it possible for pretty much anyone—without any technical skills—to start a business with very little effort or cost. Whether it’s something small like a blog, a consulting or coaching service, or even a product-based business. But that doesn’t mean it’s easy to have a successful business.
Here are 3 common mistakes new entrepreneurs make that can slow you down even before you get rolling.
1. Scaling Up Before You Need To
A year ago, my wife and I visited my brother Ben in Texas, and he served us some homemade candied orange slices that were dipped in dark chocolate. My wife and I loved them so much that we suggested he start selling them. Ben got excited at the idea of having a candied orange business. And he immediately started yammering on about how he could set up a commercial kitchen with drying racks for the oranges and big caldrons of chocolate and….
“Whoaaaaaaah! Hold on, Ben.” I had to stop him right there. I appreciated the enthusiasm but he was making a fatal mistake. “Instead, why don’t you just make a batch of candied oranges like you already did [in his kitchen] and find people to sell them to?”
Like so many other entrepreneurs, Ben mistakenly thought that you need to have “official” infrastructure to have a business. In truth, all you need in order to have a business is one customer. That’s what makes a business—not fancy factories or offices. Scores of businesses get started in kitchens and garages, or in living rooms. And the smart ones wait until the momentum of the business (customer demand) FORCES them to scale.
2. Pretending You’re a “We” When You’re Just a “Me”
Another mistake I see new entrepreneurs make is thinking they need to look like they have huge teams when they’re just one-person operations. You go to their website, and it talks about what the business is about—but then it doesn’t mention the mastermind behind it all. Their About page is cluttered with cheesy stock photos and uses words like “we” and “team.”
But with a little investigation, it’s pretty obvious they’re just one person sitting in their kitchen desperately trying to look like a “real company.”
I get it. I made this mistake early on when starting The Distilled Man. I thought people wouldn’t take the site seriously if they knew it was a one-man operation. I even followed some wacko advice I read somewhere about not putting “Founder” or “CEO” on my business card—which, it claimed, made you look like a bigger company. Plus, if you were negotiating, it supposedly helped you use the classic car-salesman ruse: “Sorry, I can’t make that call, I’ll need to go talk to the boss.”
Now I know that advice is a pile of crap. First of all, trying to act like someone else is the head of the company when you’re actually the sole employee is an awfully shady way to start a business relationship.
Even more importantly, people often choose to work with your company based on you. When you’re a small business, sometimes the best branding is your personal branding—your story. People connect with who you really are, scars and all. They would much rather work with a company that is run by one real person with integrity—someone who is personally accountable—than with some faceless “team.”
3. Launching Something Before Understanding Your Customer
The final mistake I see entrepreneurs make is creating products or services based on what they think a need is. Sure, if you represent the target audience, “scratching your own itch” can be a great starting point. Tons of successful companies have been started where the entrepreneur was simply looking to solve a problem they faced personally.
But if you are investing time and money creating a great offering for your business, you have to set aside your own assumptions for a moment and get into the minds of your customers—to really understand their needs, wants, hopes and fears. As a bootstrapping entrepreneur, one of the risks in skipping this step is that you might gravitate towards creating a product or service based on what you can easily execute with your current skill-set and resources...and not necessarily what your customer needs.
“My yoga-instruction/dog-training service is a natural combination! I know a ton about both subjects!” you might think. Meanwhile there might be only 2 customers in North America who have a need for both of those things together.
The other risk is that you may have a winning idea that people are willing to pay for...but without spending time talking to customers, you may not really know WHY people are willing to buy. And that severely limits your ability to market it. You might have the greatest product in the world, but if you don’t tap into how it addresses your customers’ specific needs, you won’t be as successful selling it.
While some of this advice may seem like common sense, many intelligent and capable entrepreneurs have failed as a result of making just one of these classic mistakes. If you can take these fundamental tips to heart, you’ll have a far better chance of growing your business idea to fruition...and success.
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