For those who have made the brave decision to step out and start your own business for the first time, you’re entering into brand new territory. So, it’s only reasonable to expect you’ll make a few mistakes along the way. But some mistakes are more costly than others, and some can truly destroy your chances at success. Here are three mistakes new business owners should avoid at all costs, according to a Rob O’Byrne, an experienced and successful entrepreneur based in Sydney, Australia.
Mistake #1: Failure to Ensure There’s a Market for your Products and Services
If you’re going into business because you have a real passion for a particular product or service, that’s great. But keep in mind that your own passion doesn’t translate to customers walking in the door. If you’re an avid coin collector, for example, and you want to open up a specialty coin shop in your area, you need to know whether or not there are other collectors in your area who are willing to spend money on their hobby.
On the other end of the scale, you may find that there are dozens of similar businesses out there, selling the same products or services. This can be a good or a bad thing. On one hand, it confirms that there’s lots of demand for the product or service. But breaking into an existing market and competing against established competitors can be daunting. If that’s the case, your task will be to focus on differentiation. What makes your products and services more appealing than the competitors. And that’s where your passion comes in.
Mistake #2: Failure to Sell
If you have a fantastic product or service, but you can’t sell it, your business is going to fail. That’s because business is all about selling, not about the product or service. If sales leaves you with a bad taste in your mouth – if you feel like sales is ‘tacky’ and lacking in class, you’re looking at it the wrong way.
If you’re selling a product or service that truly provides value to the customer, then sales is all about being helpful. If your customer is hungry and has a preference for delicious hamburgers, selling them the very best hamburger in your city will make them happy. That’s not tacky, that’s a kindness. If a homeowner needs their pipes fixed, selling them your skilled plumbing services to get the job done is a favor that can really make a difference in their quality of life. And helping out is as classy as you can get. If your product doesn’t provide real value to the customer, then you probably shouldn’t be going into business.
If you’re not good at sales, then there are a couple of things you can do to prepare before starting your business. First, get a part-time job selling something. You’ll get training and experience that will help you to understand and internalize the basic principles of sales in your own business. It might feel a bit humbling for a while, but anything that prepares you for success in your own endeavor is worth it. Second, if you can’t see yourself handling sales, then at least partner with somebody who is really good at it. Then you can focus on operations (production or service delivery) while your partner sells the business.
Mistake #3: Failure to Plan
A successful business is one that is on an upward trajectory. There’s really no such thing as a ‘plateau’ in business. That’s because time always passes, markets always change and customers get bored or their needs change. So, real success in business is over the long term, and it’s all about growth.
Imagine your new business is like a watermelon seed. You can plant it in a starter pot, but it would be ridiculous to expect it to stay there. Watermelons are enormous! You’ll need a plan to transplant it into a large garden plot. If you don’t, then you’ll never see any fruit. Not only that, but the plant will wither and die for lack of space!
So, make a plan for the long term – even if all the details aren’t filled in yet. What is your path for growth? If you don’t have an answer to that question, you won’t be prepared to take action when opportunities arise. And that’s a great way to be left behind by the competition.
In the end, as a new business owner, you’re going to make a lot of mistakes. But you can avoid the biggest, most destructive ones. And you can do that by planning and preparing in advance.