Starting your first business can be both exhilarating and nerve-wracking. The nervous feeling comes from all of the "what ifs" that cloud your mind with unnecessary negative thoughts. Of course, it is very important for entrepreneurs to have a positive mindset, and one of the best ways to do so is to prepare yourself for the entrepreneurial journey. A part of that preparation is learning from others' mistakes! Making mistakes is inevitable for every business owner, and it is a necessary part of the process. However, I'll give you a heads up on three common mistakes of first-time entrepreneurs so that you can do your best to avoid them.
1. Too many expenses
When we first start a business, we can't help but think of all of the things that we will need (or think we will need). The truth is, most businesses (especially service-based businesses) don't need much when they first start out. The goal is to keep your expenses LOW . Even more, it is important to keep your personal expenses low as well. Entrepreneurs have to make sacrifices, and those sacrifices often come with a great reward. When I first started my business, I cut my cable, stopped getting my hair and nails done, packed sandwiches to eat for lunch if I was on the go, gave really nice cards for birthdays and holidays instead of gifts, etc. I had (and still have) a goal, so making these sacrifices was important to me to realize my vision. Here are some ways you can cut costs for your business and save:
Get a virtual office or just meet with clients at coffee shops (replaces full-time office)
Use spreadsheets to keep track of accounting and business matters (replaces software)
Get a Google Voice account and create a business number (replaces second phone line for business)
Design your own website and logo and get feedback from friends; watch YouTube videos for lessons
Cut down on unnecessary monthly fees (cable, lots of cell data, the salon, gym memberships (work out at home or run in your neighborhood), etc.)
These are just a few ways you can keep your expenses low, and I'm sure you can think of at least three more - I challenge you to! Overtime, you can upgrade as your business makes more money.
2. No access to capital
Having access to money when your business needs it is important for every business owner. Now, that doesn't necessarily mean that you need to have a large stash of cash, but you should at least have access to some funds to keep your business afloat. The truth is, there will likely be some months where the money isn't coming in as quickly as you want it to. It would be way too early in the game to just quit just because a few of your first months aren't generating revenue. Therefore, you should have access to some funds to cover your mandatory expenses.
Also, access to capital is important so that you can take advantage of opportunities to generate revenue for your business which require an investment upfront. For example, if there is a community expo that will have your exact target market in attendance, you may want to serve as a vendor for that event. To be a vendor at events, there is usually an upfront fee; however, if your ideal clients will be there, that is an investment that you should really consider making. In this situation, without access to capital, you will miss out on the opportunity to acquire new clients and therefore, make more money.
-> FREEBIE! Getting access to capital can be quite a challenge for entrepreneurs. Good thing I've gathered details for you on 8 Ways to Fund Your Small Business! Thank me later :)
3. No brand or inconsistent brand
A business's brand tells consumers how much they can trust the business. Your brand is your business's reputation and the experience that consumers get when they work with you. Without a brand, consumers think nothing of your business. An inconsistent brand can do even more damage because it can lead consumers to think that you or your business is not authentic in it's purpose or service.
The first step in building a trustworthy brand is defining it. At first glance, defining your brand may seem easy, but it takes some soul-searching, decision-making, and data-gathering. When defining your brand, be as clear and specific as possible so that you can build a consumer experience around that brand. Once you define your brand, every public thing that you do should be consistent with that brand definition. Do your social media posts reflect your brand? - your retweets, your comments on others' pages/photos, your introduction when you meet new people, your response to complaints, your support of other businesses and organizations, your bio, your photos, your advertisements, your policies, etc.? It must all be consistent with the brand that you are building.
Don't let these three common mistakes put you out of business! Keep them on your radar, and keep building!