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11 common mistakes to avoid when starting a business
All founders make mistakes. Some are just honest enough to openly share them so others can learn from their experiences.
Because we know how valuable these experiences are, we have put together some tough real-life mistakes that founders made, so that those starting out can avoid them:
#1. Selling too cheap
Call it impostor syndrome or call it not doing your homework.
The truth is that this situation is way too common among first-time entrepreneurs. Know your value and don't be afraid to charge for it.
This copywriter started with super low prices. Two years later they charge 4x their initial fee and its agency became a $130K/year business.
#2. Going after every opportunity (shiny object syndrome)
Chasing new opportunities before having an established business will take your focus away from the original idea and can delay your growth, distract you from your goal, and potentially put you out of business.
This Amazon expert went through this, thankfully he shook that mentality away and now generates $720K/year writing kickass product descriptions.
#3. Not knowing your numbers
Chances are your strengths are in sales, marketing, or tech. But there is no way a bootstrapped business can succeed without a founder being completely on top of finances.
Costly mistakes, cash flow, and poor forecasting can send you broke.
#4. Trying to grow too fast
Once you’ve had a taste of success it’s only natural to think of growing.
However, expanding too fast can be a lethal mistake. Especially if you do it before having your systems in place and a little capital to fund the operation in case it doesn’t as planned.
This 19 years-old who started a $1M/year moving company had to learn it the hard way.
#5. Trusting the wrong people
Inexperienced entrepreneurs are often targeted by fraudsters that try to impress others with fancy titles and nice suits.
This young entrepreneur invested a lot of money with a “high-ranked executive of a Fortune 500 company”, who turned out to be a conman. Luckily, she was able to recover and still built her $2.4M/year business escort service.Sponsored by SEMRush
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#6. Running the business with a notepad
Data hygiene is absolutely crucial to being able to scale a business, especially once you reach a certain volume.
Poor quality, multiple formats, and different sources in the data can be a huge impediment. If you don’t lay the right foundation, it can take years of manual data scrubbing to clean the mess.
This e-commerce sells $5.6M/year worth of seeds, do you think they could do it using pen and paper?
#7. Not automating and delegating daunting manual processes
These can easily prevent you from spending time on important activities. That can have a meaningful impact on the business.
It’s common to do almost everything manually in the early days. However, that significantly drag the business down.
This $1.8M/year meal prep and delivery business was able to take off once they started automating processes.
#8. Lack of focus
You need to make some sales. And quick. But trying to sell to everyone and everything, with no target market, no niche branding, and no voice. Is just a recipe for disaster.
This sports supplement brand grew to $30M/year once it found its voice.
Similarly, trying to do too much too quickly, can spread you pretty thin. This was preventing this $6M/year beard products brand to keep growing.
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#9. Choosing the wrong partners
Sometimes a solo founder can’t do it all.
If you need partners, you need to choose them carefully. Make sure you run some background checks. If you can, contact previous clients, or colleagues.
Hiring a fancy firm can result in losing thousands of dollars. Make sure to set the expectations and establish clear goals.
This $1.7M/year candle-making business lost thousands of dollars after hiring the wrong agency to run its Facebook ads.
#10. Ignoring key growth channels
Lots of brands rely on retailers to scale and grow. That’s why it’s important to master this skill. However, it can be tricky.
You need to create a great sales email or phone pitch. And deliver it at the right time. Buyers have budgets at different times throughout the year, so you need to ensure you’re getting into their inbox when they have the budget to spend or before they do so they can keep your product in mind when they do have the budget.
#11. Overlook ad campaigns
It’s easy to get excited as web traffic and sales start to come in after an ad campaign goes live.
But, how much is each new sale costing you? It’s simple math, yet very important to have it under control. Because if the result is negative, instead of growing your business, every sale could be a step closer to the death of the business.
Thanks for reading!
Hey! 👋I'm Pat Walls, the founder of Starter Story.
We interview successful business owners and share the stories behind their business. By sharing these stories, we want to help you get started.
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