Entrepreneurship is hot. The idea of being your own boss, deciding your life and destiny and building something to make you a multi-millionaire in short order, is captivating a generation.
I know how they feel. When I was 28 years old I decided I was never going to work for someone again. An end to bosses in my life. Statement. Drop the mic. I’m out…
By the time I was 32 I was broke, in large amounts of personal debt and failing as a freelancer. When I’d said ‘no more job for me’, I hadn’t imagined begging in a NatWest branch to get a credit card cheque cashed. Oops.
I knew I could never go back to a job. I was always mostly unemployable (they hate it when you constantly ask ‘why?’ especially to statements like ‘you need to be here at 9am’). With some application, some luck and a lot of false starts I eventually climbed out of that hole to do decently well as a freelancer and then to have a successful business with another one on the way.
If you’re looking to leave your job, or hate the world of work generally, or have done it and are trying to make it work, then I applaud you and this article is for you so you can avoid the mistakes I made.
If your dream is to have a business that works, gives a ton of value to your customers and makes you filthy rich along the way then here are the biggest mistakes you’ll make starting out.
1: Quitting your job too soon
You hate your job, I get it. You feel frustrated and bored, as if you’re wasting time. You’ve got your killer product or service idea you love to do and can’t wait to get started; I get that too. The beginning is the most exciting time and it’s really tempting to see anything as an improvement. But think before you jump. Your job provides you with something that’s important in life…cash! As soon as you leave, the cash stops and, unless you have a big cushion or clients ready to go, that’s a problem.
For many people the best way to start is in parallel to your job. If you’re passionate enough about your future you’ll find the time. Work on your business idea late at night, early in the morning or at weekends. Make a bit of sacrifice for your future; I promise you it’s more fun than the latest box set!
When you find something that looks like it’ll work talk to your boss or company about going part time, you’ll be amazed how often this helps your employer. For you it keeps some income coming in while freeing up time to work on your new business.
2: Thinking it’s about you when it’s ALL about them
It’s important to have a vision and ambition for what you want to achieve. All too often business owners fall in love with their ideas for that vision and become wedded to a certain product, service or offer. They think it’s about what they want to produce or build or teach.
This is a natural instinct but it’s wholly wrong. What matters is what your customers want and before you have customers what the niche you’re in wants.
It’s critical that one of your first actions is to identify the group you want to sell to then ask them what they want. Do surveys, interviews, focus groups. Research the sites, forums and meet ups they frequent. Discover how easy it is to reach them (hint if you can’t find them your business won’t be able to either) and start talking to them and listening.
Shape your business not around your ideas but around your audience’s biggest un-serviced needs. Tattoo this on your inner eyelid ‘always chase needs’.
3: Failing to test before you start
The business owners life is constantly trying to balance your vision and drive with actual evidence that your latest great idea will actually work! The solution is testing.
If I could give you one piece of advice it would be to test everything and never stop. We’ve already talked about listening to your market, testing is the real world application of that. A lot of it can be done before you ever leave a job to start and can be a huge shortcut in the early days.
As soon as you have your first idea start testing it. Share it with potential customers (not your mum and friends – I’ll save you the suspense; they’ll like it) and see what they think. Push them for the negatives – find out why the idea will fail. This isn’t about making you feel good, it’s about getting it right.
As quickly as possible get a version of the product or service you can actually sell and start pitching it. This will not and should not be perfect. A great tip is to build a cut down version of your final product (for example we sell online courses, so selling the first module at a low price has been an effective test).
The faster you can find out if something will work the better.
4: Brand building when you should be selling
New business owners often want to establish a brand for their company but this is almost always a distraction and often an expensive one.
Trust me, you will be seduced into doing this. Getting a snazzy logo made by a designer is something to show your friends that you’re on your way. Getting a business card done gives you something to impress at networking events. Building a bespoke website feels like you’re making something to show the world.
However the problem is none of this stuff will make you much money or bring your goals closer.
Never in the history of business has a potential client said ‘well I’m not sure about the proposal, but hot damn look at this logo, I’ve gotta go with these guys’.
More profoundly none of these things are helping your prospective customers with their problem or adding value to their lives. Do that in a profitable way with a business model that works and your brand will build itself. Sales and repeat customers build brands the most effectively and that’s what you should focus on from day one.
5: Thinking you’re failing if you’re not instantly succeeding
You live in an instant gratification world. You’re being conditioned that to get something you just have to want it. The problem is business doesn’t follow this pattern and it challenges our ‘gimme it now’ mentality. Early on you’re most likely going to have to work through a period of… prepare yourself… delayed gratification!
At the start you’re going to do a huge amount of work for little reward. You’ll be developing your product or service, networking, pitching to clients and customers, building a site and so on and on… and all the world will see is a different line on your LinkedIn bio.
Stick with it. If you do the right things repeatedly towards you’re goals they’ll happen and when they do it can happen quickly. Your revenue graph will be a hockey stick with a long flat tail before it shoots up.
To give you some perspective my first internet business did £11,000 in year one, £45,000 in our second year and then £250,000 in the third year. It’s done over £1.6 million in sales but if you’d asked me how it was doing and what it was going to make at the wrong point in the first year you’d have received a very negative reply; something like ‘well at least I formed a company… what have you done?!’ as I nervously checked my current account for the third time that week.
The important thing to realise about starting out is it’s harder to go from 0 to $1 in sales in a new business than it is to go from £1 to £1 million. It’s harder to start than it is to grow.
Stick with it, work hard and smart towards your goals because the rewards are huge. You will not only build something to take care of you and your loved ones for years but to create work and opportunity for others and you’ll never need to ask permission from your boss for anything again.
This article was contributed by Nick Wealthall.