In nearly 10 years of serving small and independent business owners, I have made a lot of mistakes and I have seen a lot of mistakes. In fact, dozens of people are sharing the small business mistakes they've made right now over at our social networking site.
Some mistakes are unique, but over the years, I have noticed a few things that probably put millions of businesses in the graveyard in the first year. This post discusses 3 thing small business owners do that kill their businesses before they get off the ground.
- They Don't Conduct Meaningful Research. The Internet has made it easier and more fun than ever to start a business. You can research your industry for free online. You can source and order ingredients and supplies, and then have them delivered to your front door in 24 hours. You can join social networks to connect directly with people who are doing what you want to do.Because the Internet has made it easier and more fun, everybody's doing it. As a result, the competition is stiffer than ever. It's harder to rise above the great noisy crowd and be heard.
The only way to do it is to research exactly what business you want to be in and pursue it with unwavering focus. Failure to conduct necessary research in advance of hanging out your shingle is the first way to kill your business before it starts.
Some people think research means reading a bunch of industry reports, chatting with others and creating a business plan. While all three of those things are a part of the process, the mistake I see most is that people don't know when to stop. They don't know when they've done enough research, or when they've chatted with enough people, or when their business plan becomes meaningful.
But the truth is that you can't do enough of those things. But you can focus those efforts so you have something to show for them besides a bunch of accumulated knowledge.
Knowledge is powerful only if it's put to good use to execute specific goals.
But how do you know when you've accumulated enough knowledge to guarantee success? Well, you won't. If it were that easy, everyone would have a successful business. Even though you cannot guarantee success, you can maximize your chances of success, and here is some easy advice to follow in that regard.
Closely follow 20 people who are doing what you want to do for a year so you can learn the industry and identify a specific niche that they are not filling. Here's a checklist you can follow.
Subscribe to their newsletters.
Follow and communicate with them on Twitter.
Follow and communicate with their friends.
Become a Fan of their FaceBook Page.
Subscribe to and comment at their blogs.
Buy their products and services so you can see how they work.
Comb through every website they own and participate in.
Watch what they do and how they do it.
Go and hear them speak at conferences.
Find out what software they use to maximize efficiencies.
Who is their blogging consultant?
Who is their business coach?
Join a few organizations that they belong to.
Read their books and the comments they leave at other people's blogs.
If this sounds like stalking, it is, but only in a business sense, and it's not unethical so long as you don't infringe on their intellectual property once you launch your business.
Once you've done it for a year, if you have watched closely and taken good notes, you will know pretty much everything you need to know to do what they do. You can then move toward putting everything you've collected to work and launch your own business.
- They Waste Money On Things That Don't Really Matter. Through IBN, I work a lot with startup cosmetics companies. One common mistake I see is spending too much money on ingredients and packaging supplies. Because people are so passionate about making products with useful and quality ingredients, they sometimes spend too much money on experimenting. These are sunken costs that are never recovered because most of the products don't sell.While there is always a certain amount of experimentation, research and design in business, if a business owner does not balance this with profitable product launches, the business will eventually cannibalize itself.
If you've done your research carefully, stalked enough business people and taken enough notes, you'll have a pretty good idea of how much to invest in trying out new things and how much to invest in selling the ones that are already a part of a discrete line of product offerings.
Some money can and should be spent on experimentation. But most money should be invested on things that really matter, like promoting products that already sell well. Doing this will generate the cash needed to experiment without dipping heavily into the money needed to expand the business.
- They Do Not Maintain A Blog. I am a firm believer that owning and managing a blog is the single most important thing you can do for your business, once you have a niche and a quality product line in place.(You can take my 4-part blogging tutorial here.)
The main objections I hear to blogging are that it takes too much time and that people don't know what to blog about.
Blogging does take time, but if you don't have enough time to blog, then you don't have enough time to market your business. And if you don't have enough time to do that, find something else to do.
The second problem, not knowing what to blog about, should be solved in spades if you comply with the advice in Step 1. If after watching people in your industry blog for a year, you still can't do it, find something else to do.
Blogging is not an option for a successful business owner. And blogging well is quickly becoming a requirement as well. That doesn't mean you have to be Ernest Hemingway, but it does mean that you must research your industry, identify a specific niche (Step 1) and invest your money, rather than spend it (Step 2). Do these things, and use your blog to share what you learn and engage your target customers, and your chances of being a profitable business for the long term will rise substantially.
Question: What do you think of these 3 things? Have you been guilty? Do you have others to add? Feel free to share this post and your comments using the social icons below if you think it would be helpful others be successful.