I have a pretty phenomenal business that I enjoy running these days. I work with a team of awesome people and get to help businesses run moreefficiently. This wasn’t always the case. I actually started the mostterrible way anyone could start out. How? Fails. Many, many, many fails. However, this should be an encouraging post, so I won’t overwhelm youwith all the terrible things I did wrong when I started my businessalmost 12 years ago. I will highlight the ones that I believe had themost impact on my business bottom line and chances for success. I ambeing transparent in efforts to help someone reading this. Why makemistakes if you don’t have to.
So, here are 5 small business mistakesyou can avoid.
1. Trying To Be Fancy-pants
I had to start my business the fanciest, most cost inhibitive waypossible. Thinking that more flash and panache would bring morerevenues. I wasn’t in the beauty business so this line of thinking madeno sense at all. I got office space, purchased furniture and otherequipment on credits cards. I was almost $10,000 in the hole before Imade once red cent. I never had one client visit my office and rarelyhad enough money to have employees to even come to my office digs. Icould have easily run my business from home. Major fail. The lesson here is to go with the lean start-up method. The bare minimum will do untilyou can afford more.
2. Not Setting Goals
Saying you want to make $1 million in your first year of business isakin to having no goal. That’s what I had: a no-goal, goal. Miracles dohappen, but let’s be realistic. Goals should really be on par withpresent day capacity. If you’ve got no inventory, no following, noexposure, no client portfolio, then you need to bring your goals intoreality. I still believe I will hit the million mark, but these days Ilook at what’s in the pipeline and consider historical trends to come up with reasonable numbers I can believe in and shoot for. This principlecan be applied to any key metric: page views, new clients, etc.
3. Chasing OPM
What’s OPM? You know, other people’s money. For some reason, I had this crazy idea that I needed large sums of money to finance mysmall potato efforts. I spent too much precious time trying to procureOPM. This is time that would have been better used being creative inbusiness endeavors. It seemed like I was always completing loan orcredit card applications, looking for angel investors or enteringbusiness plan competitions. Those things have their place and can behelpful for some businesses, but I am a fan of bootstrapping until youabsolutely can’t bootstrap anymore. If I would have received anysubstantial amount of investment or loan money in my early stages ofbasically not doing anything well at all, it would have been a disaster. I am happily and successfully bootstrapping with no debt or outsideequity today. This is so much better than having debt!
4. Neglecting Your Financials
I didn’t start keeping accurate books untilabout 5 or 6 years into my business endeavors. That’s basicallyterrible. Once I did, guess who had some questions for me. Yep, the IRS. If I could do it again, I would research thoroughly my tax obligationsas a business owner. I didn’t realize until pretty late in the game that I had to set aside a portion of business earnings to pay payroll taxes. Major, double offense fail!
5. Being Too Persistent
I know persistence is vital to success, but what happens when youactually have a sucky idea? I spent far too much time trying to be a“winner not a quitter” when I needed to be flexible and explore other,more profitable ways to run my business. A business pivot is not abusiness fail. Consequently, I’ve changed my business model at least 5or 6 times, with the most recent lines of business being the mostprofitable for the last 7 years or so. I wish I had done this after year 2 of seeing no profits. Oh well, live and learn!