7 top mistakes entrepreneurs make (and how to avoid them) Part 1
I’ve worked with many self-employed people over the years, and that has given me quite a bit of insight into how the solopreneur mind works. I usually see great things such as lots of energy, passion, creativity, and ideas, but I also see some not-so-great things, things that I would classify as common mistakes. And that’s the focus of this week’s article.
Today we’ll go over 4 of the top 7 mistakes I see people make on their self-employment journey. (The other 3 will make up next week’s article).
1. Spending too much time seeking funding
Many of my clients have told me that they want to find funding to get their business off the ground. Some spend a lot of time researching this and networking with people who might be investors. The problem with this is that there is actually rather little funding available, and all that time you spend might be for nothing, especially if you are only looking for small funding amounts.
Instead, I suggest it might be better to put your energy into the nuts and bolts of your company. All the time you may have invested in trying to find funding might have been better used in actually getting the business going. That’s because getting down to the nuts and bolts is what is going to bring regular money in. And, even if you do get funding, you still have to get the business going!
So instead of spending time trying to find funding, spend it knuckling down instead. Work on marketing, on finding leads, and on fine tuning your product. Because the sooner you get those things down, the sooner you’ll start making money.
2. Not understanding who their ideal customer is
This is a problem many business owners make. They think that the way to make money is to advertise to as many people as possible. Nope.
You want to advertise to specific people only—the people who really need what you are selling and are looking to buy it.
This comes down to understanding who your ideal client is. That’s a task that every new business owner must get right. Yes, that means basic demographics such as age, occupation, hobbies, etc., but it means more than that. It involves knowing what words your ideal client uses, how they think, what their problems are, and the reasons they have for buying or not buying.
Another way to think about this is to focus on niching down. That means developing a product/service that serves a small niche of people who will really benefit from what you have to offer, and who are likely to actually buy from you.
The idea behind this is simple: if you try to sell to just anybody, your marketing message will be weak.
Here’s an example.
Imagine you are a 55-year-old who is wanting to retire early, and you are looking for a financial planner to guide you on that. Who would you be more likely to contact?
Advisor A, who advertises his services as “Financial Advising for everyone”,
or
Advisor B, who advertises his services as “Specialist in early Retirement”.
The second advisor’s message would be far more likely to resonate with you. Clearly he has exactly what you need.
Now, there will be fewer people interested in early retirement planning than there are total people interested in financial advising in general, so you are fishing in a smaller pond. But people in that small pond will be far more likely to buy from someone who specializes in early retirement. Why? Because he is a specialist in exactly what they need. And, because he is a specialist, he understands them and speaks their language. That means his ideal marketing message will be tailored specifically to people aged 50-60 who are interested in early retirement. That message will address the types of problems/needs they have and will speak to them in the words they would use to describe themselves and their situation. As a result, his message will be meaningful to them, and will hit home. In contrast, a general financial message won’t really resonate with anyone because it’s too vague.
Here are a few more examples.
Example 1
Rather than sell “website design services”, a website designer specializes and sells “Easy to use sites for the busy Realtor”. She made sure that she thoroughly analyzed exactly what real estate agents need in a site, what the shortcomings of most sites are, what problems agents have, what they find lacking in current sites, etc. She then uses that information in her marketing messages as well. Realtors will recognize themselves in her message and will take notice.
Example 2
A landscape designer decides to specialize in “low maintenance landscaping for seniors”. He understands seniors and their gardening challenges. Perhaps they can’t bend down as easily as they used to. Low maintenance plants may be the answer, or perhaps raised flower beds. Seniors might also go south for the winter, so would need someone to put their garden to bed for the winter, and prep it come spring. If our landscaper mentions solutions to these problems in his advertising, seniors are going to be much more likely to phone/email him than his competitors, who don’t talk about such things.
3. Trying to sell a product/service, rather than a benefit
I’ve talked about this concept in earlier articles, but it bears repeating.
When marketing your product/service, you need to focus on the benefits it gives the purchaser, not on the product itself.
Here’s an example of what I mean.
If you are a website designer, you might be tempted to sell “beautiful websites”.
But clients aren’t really looking for that. Instead, they are looking for a site that attracts leads and makes them sales. That’s the benefit you can give them—a site that brings in sales.
So it is far better to advertise “close more sales, faster”, than “get a beautiful website”. The former is selling the benefit, the latter is selling the product.
Here are a couple more examples.
“Eat guilt free this Christmas” (vs e.g. “New diet plan”).
“Wake refreshed and get more done in a day” (vs. “Try our sleep method”).
To come up with benefits, think about why your client would want to buy your product. What is the end result they hope the product will give them?
And, going back to our gardening for seniors example, “Keep gardening, even with arthritis”, is better than “Garden services”.
4. Not understanding that sales is a discipline in itself
Most people who start a business worry about sales, but few take the time to learn how to DO sales. The fact is, salespeople have formulas, techniques, and rules that they have studied and learned. They don’t just talk off the top of their heads.
Would you try to play a new game without first reading the rules? Would you try to build a house without first learning about the necessary tools, methods, and procedures? No!
But time after time I see solopreneurs trying to make sales without first doing any learning on the subject. Then they often wonder why they aren’t closing many deals. It’s because they don’t know how.
So you must learn about sales. That includes things such as:
How to find leads
How to identify who is a good (hot) lead and how to weed out poor ones
How to describe your products so that they sell
How to get people to trust you
How to close a sale (that means getting a person off the fence and making the decision to buy)
There are specific methods used to accomplish those things. These methods differ a bit depending on whether your lead is talking to you in person, on the phone, or is finding out about you online (reading your website). Heck, creating a website that sells is a whole huge area of sales in itself!
The bottom line is: make sure you learn about sales. It is a necessity if your business is to survive.
* * *
So those are the first 4 on my list of the top 7 mistakes I see solopreneurs make. Next week we’ll cover numbers 5-7.