If you don’t want to read it, you can watch this video.
You want to start a business, but you are afraid of making a mistake. In this video, I’m going to tell you the 8 biggest mistakes founders make and how you can avoid them.
The first mistake that many founders make is thinking you need a lot of money to get started. This is actually a big mistake, but many people do not get started at all because they think they need a lot of money to start a business. Essentially, all you need to get started is a working model.
You’ll take that working model or your business and put it out into the marketplace to get feedback. With that feedback from the marketplace, then you write a business plan. You can start with as little as $50 or $100. You can start with the money you have in your pocket right now.
The second mistake many people make is waiting too long to start. It may not be a money issue. It could be a low self-esteem issue. It could be about bad information. Whenever you asked business owners, “Do you wish you would have started your business sooner,” the answer is always a loud, “Yes.”
The time is now and this is why. The longer you wait, the greater the chance that the marketplace will change. You may have an idea or concept right now that will work and will win, but because you’re waiting, the marketplace is more competitive when you finally get started.
I’ll give you an example of this problem. In 2009, I wrote my first book, Making Money A to Z with Storage Unit Auctions. If I had waited one year, I would not have enjoyed the success I had by having a 14-month head start on the storage auction shows, and a 21-month head start on all the other internet marketers. I dominated the space for 2, going on 3 years. If I had waited, I wouldn’t be talking to you right now.
Mistake #3 is focusing on the product and not the marketing. This is what I mean. It’s true, you do have to focus on the product too. Here’s the thing. If your marketing is on point, it makes it easier for you to sell the product. When you’re putting a business together, you have to focus on the marketplace first and the product second.
By focusing on the marketplace first, it will force you to ask people certain things, like whether they like your idea, for example. Many famous founders make this mistake. They will go ahead and put a lot of money behind the product, then when they take the product to the marketplace, the market says, “We don’t really want that.”
How do you avoid this mistake? You go to the market before you start your business. Even if you don’t have any money, you can jump into the marketplace and ask questions. You can survey people and compile your data.
The fourth biggest mistake many founders make is not talking to real people first. You can have a huge Twitter following. You can have a huge Instagram following. You can have a million YouTube subscribers and still be off-base because you didn’t ask people what they want.
Recently I talked to over 200 people. I ask people all kind of questions. The information was so valuable that I changed my business plan. I asked real people in real time what they wanted. It makes a huge difference when you have this type of feedback.
Many founders in the internet world admit they don’t want to ask anyone anything. They automate and outsource and then want to sit back and collect the money. Sometimes that will work, but most of the time it won’t. Put your concept out there. Take surveys. Talk to people so you can win. It’s that important.
This is a big one. This is huge. This one can cripple your business before you even start. The fifth biggest mistake is not designing your business to scale. Now, what does that mean?
Let me explain it with an example. I want you to think about a pumpkin. Not too long ago, there was this guy that made pumpkin molds. He would put a growing pumpkin in a mold and it would grow into the shape of the mold. It might be a Frankenstein shape or some other interesting design. Now the pumpkin could have grown much bigger than the mold, right?
In this example, the mold represents infrastructure. A business can only grow as big as it infrastructure allows. By not designing your business to scale, you’ll be like that pumpkin. You could have grown bigger, but because of the mold, which is the infrastructure, you can’t get any bigger. It’s going to hold you back. It’s going to frustrate you.
A business without infrastructure will not grow past a certain point unless the owner does something radically different. In certain cases, you would have to completely modify the business model in order to scale. Many founders are trapped in a business that feels like a job.
Mistake #6 is a killer. One of the biggest mistakes any founder makes is not hiring fast enough. Many founders get the “Me, Me, Me” syndrome. They don’t hire because they don’t think anyone can do the job as well as they can. They put off interviewing. They put off talking to people. So, they’re building this business that can’t scale. Each month they are in the business and don’t do these things, it becomes harder to do.
If you have 10 or 15 years in business and you’ve only hired maybe 1 or 2 people, you are not earning as much money as you could. If these folks had hired people early on, they could have increased their earnings tenfold. That’s how important hiring soon enough is. If you don’t hire people to scale your business, at some point a competitor who is doing these things will eat your lunch.
Mistake #7 is a killer too. It is commingling funds. What is that? You have not separated your personal income from your business income. In cases where your business is your soul source of income, commingling means you have not created an account to pay yourself.
Why is this important? Let’s say you want to sell your business. When you want to liquidate, you need an exit strategy. You need financial protocols. If you don’t have that stuff in place, buyers will lowball you on your price.
Mistake #8 is being the business instead of working on the business. Let me explain. Let’s say you have Don’s Diamond Shop. You are cutting the diamonds. You are buying the diamonds. You are doing everything. You are the business. The minute you are away from the shop, the business is effectively closed. What Don needs to do is hire someone and start building a team.
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