3 Most Common Mistakes Entrepreneurs Make And How To Fix Them
Big Rich Money Is Here
I’m so excited about the book I wrote with Candice Kilpatrick Brathwaite! Our book Big Rich Money: How To Turn Your Business Intentions Into A Profitable Company will publish on August 9, 2021. And the Big Rich Money E-Course is now open for pre-enrollment!
Big Rich Money guides you how to avoid the most common mistakes and helps you to succeed. We both have run our own companies, and worked as consultants for companies of all sizes, from the Fortune 1 company to small businesses, and we’ve helped startups and solopreneurs to get their businesses off ground. Now we want to share our consulting secrets.
First, two important lessons we’ve learned from working with a variety of companies.
Failures often teach you more than successes, but be smart and don’t do all of the failures yourself. Learn from other people’s misfortune. That’s why we are sharing what we have seen and experienced.
Companies make very similar types of mistakes regardless of their size or age. This, of course, leaves a lot for interpretation. Yes, experience helps, and the losses of a new company rarely are as bad as those that have been running for a while. But we identified 7 most common mistakes we’ve seen companies make, regardless of their size. Here are three of them.
3 Most Common Mistakes Entrepreneurs Make
Mistake #1: Not Understanding The Need For Investment For Growth
Starting a new business can be a lot of fun, especially when you have a product that people want to buy, interest around your company, and you are able to kick it off fast.
It can feel amazing when you can just start “doing” without a big plan.
It can feel like you have a great flow, and things are going great! You almost think that you can grow your business organically as the sales start going up.
Most people can’t.
Funding, investment, or new resources are needed for growth, regardless of how established your company is. Don’t wait for the moment that you can scale, plan for the moment!
Plan your resources in a way that you can manage the growth. You need to plan the growth on every level of your business, and be ready that while sales are going up, so are the expenses, need for new team members, new tools and much much more. Sometimes preparing for growth means investing in your skills, hiring help, or buying new tools.
When I started my Skimbaco online store in 2007, my goal was to “sell as much as possible”! When a product from my store was gifted to Tom Cruise and he said it was his daughter’s, Suri’s, favorite when he appeared on Oprah Show, my sales skyrocketed. Sadly, it was not all good news, because I was not prepared for such success, and I realized “sell as much as possible” is not a good sales goal, because eventually you will run out of products to sell.
That’s what happened to me too. All of the most popular items sold out fast, I was desperately trying to buy more things to sell, do more marketing and I realized there was no way for me to fully utilize the marketing success from being on Oprah Show, simply because I didn’t have the funds to order more inventory, or hire people to help me with packing products to be shipped to customers. I was completely unprepared for big success, and even the big viral campaign that I was able to create from the Tom Cruise & Oprah moment, didn’t catapult my online store to the next level.
Mistake #2: The Business Foundation Is Not Build Right And The Company Lacks Strategy
For new companies it might be difficult to build for sustainable growth if the business foundation is not built right, but even existing companies might struggle with growth if the foundation was never built well. At some point, problems arise because of the lack of strategy. The small problems you had at the beginning, become bigger problems later on.
Luckily I realized my mistake with Skimbaco store soon, and I used the viral moment to get attention to my marketing skills. The marketing success with my own store led me to start a lucrative marketing consulting career. I then helped my clients to make sales records, and I won awards for my work. Later on as a marketing consultant, I noticed that I am not the only one who has made the same mistake. But at least I had learned.
I am often hired to do marketing strategy, and I have been working as a “rental CMO” for a few clients. The problem is that you can not really do good marketing unless you know what your short and long term goals are. My clients needed to “sell more” and sometimes those were not quantified as real goals, and even worse, when they were, it would have been impossible to produce or sell that much due to limitations of humans, finances or other resources. This led me to dive more into business strategy and helping my clients to set strategies in place so we could start changing marketing practices too.
Working with companies of all sizes made me realize how important it is even for entrepreneurs to think of their business through a more strategic lens. Building a good foundation for your business is essential.
I used to think that when you have loose plans, it’s easier to pivot and take new opportunities, but the experience has taught me that you still really need to know who you are and what your realistic capabilities are, or the “opportunities” might just become major setbacks and slow you down from reaching your long term goals.
Growing your business can be so exciting, and when things are hot, and your products are making the news and get viral mentions from influencers, it can feel like nothing could go wrong. But even big sales, funding and resources don’t help, if you don’t have a good plan of what you are going to accomplish, and how you are going to do it. I have seen companies blow through $10M of bad choices just as quickly as a small company can blow a small budget.
I highly recommend reading the Brooklyn-based ice cream company Ample Hills’ story. The small company founded by a wife and a husband team grew from one small ice cream shop into a larger chain favored by celebrities, and they signed a dream contract with Disney, even becoming the official ice cream of Disney’s Star Wars film franchise. They raised over $19M in funding, and yet they made many foundational business mistakes like not taking care of their existing stores, and eventually filed for bankruptcy.
In many ways their story is a success story, but with a sad ending and an important lesson for all of us entrepreneurs.
Mistake #3: Not Focusing On Yourself As An Owner And Working On Your Mindset
While figuring out things as you go can be a great positive outlook, you most likely will save yourself a lot of headache and unnecessary stress if you plan your business growth well. Don’t lose the positive outlook completely though, it will help you to solve problems in an unique way. There are always multiple ways to solve the same problem, and a “can-do” attitude is a plus for any business owner.
But don’t be too positive, or you can’t be realistic about your capabilities, and you mind mistakenly think you are the only person who can do everything for your company, actually limiting your growth possibilities.
Your mindset as a business owner is everything. Focusing on yourself, your skills and your mindset will help you to push through difficulties and be adaptable. It helps you to keep learning. Sometimes experience strengthens our growth mindset, but often, newer entrepreneurs can have fresher optimism and a winning mindset just because they have not hit any setbacks yet.
Sometimes the only reason why our companies are not growing is because we are our own biggest success blocks.
Learn To Avoid All Of The Most Common Mistakes Entrepreneurs Make With Big Rich Money
But what about the solution for these and more? Well, we packed that in a book and an e-course for you!
We will help you to look at your business strategy in a new way. We help you to think of ways to calculate which investments will give you a good return. In addition, we share our secret content marketing matrix, and guide you through how you can make your business more profitable. We look at some success blocks and in the Big Rich Money E-course, we even give you an exact formula on how you can turn your weaknesses into your strengths.