New entrepreneurs are prone to making rookie mistakes, from hiring the wrong people to not getting the financing their small business needs to grow.
Although everyone is bound to make some blunders along the way, wouldn’t it be nice to learn from the errors of others? To save you from wasting precious time and money at your burgeoning business, here are five mistakes that small-business owners have confessed to making. The examples, which are edited for clarity, involve two key areas: marketing and advertising.
1. Getting feedback from the wrong places
“I run LaRitzy.com, a cruelty-free beauty subscription box. Coming straight out of university, both my partner and I had no experience in this field. We had no clear direction, no clear brand identity. We were offering so many options that it drove people away. The thing was, every time you asked someone [for feedback], it was your friend. What do friends do? Encourage you! So I never figured out what was wrong. I was asking the wrong people. We went to our customers and potential customers this time. We did Q&As on forums and asked our social media fam. It finally started to make sense. We needed to focus on one thing and do it best. So we did.”
-Emily David, co-founder of LaRitzy in Montreal, Quebec
2. Spending too much on advertising
“The biggest mistake I have made so far with CorpNet is that I thought I had to put a ton of money into Google AdWords to stand a chance against our big-name competitors. We were constantly in the red because of the amount of money we were spending on advertising, and worst of all, we did not have a proper system to track our website traffic. We assumed the traffic we had coming in was from our ads, so we kept them going. One day [we] decided we had to pull the plug on the ads because it was just too much money. To our delight, we were actually bringing in just as much traffic organically via other marketing efforts, social media, etc., than the ads, and we automatically went green! With the extra funds, we hired another person on our sales team to help grow the business.”
-Nellie Akalp, CEO and founder of CorpNet.com in Westlake Village, California
3. Advertising in the wrong medium
“One thing I learned about small business: When you make a big investment in an advertising platform, make sure it’s the correct one. As an example, a few years back we had the opportunity to have a national radio advertisement for a branded wine club with the host’s name. The expenditure, for our bootstrapped, family-owned startup was huge. We enjoyed all of one sale from the deal. These were professional advertisements and we were thrilled, but evidently, no wine companies advertise [on the radio] because it simply doesn’t work!”
-Mark Aselstine, owner of Uncorked Ventures in San Francisco
4. Neglecting to build an email list
“A few years ago, I launched an information product without an email list. It was a fitness product and the first product I ever created. I thought that all I’d need to do was explain with some good copy that it was created by a body-builder (my co-founder) and then people would come flocking in. I was very much delusionally confident. I was also super wrong. We should have started by patiently building an email list. I learned the hard way that lists are super necessary for launching online products. They build anticipation and trust. By not having a list, I wasted both time and money. Nobody bought the product. From now on, everything I launch has to have its own list.”
-Edward Sturm, co-founder and managing partner at The Viral Bible in New York City
5. Not ensuring a product-market fit
“Do market research to ensure there is a genuine need for your product or service before investing money or time. I have made the mistake of building the website and put cash into marketing, only to discover my business was a bit ahead of its time for the customer. It doesn’t matter how passionate you are about your business if the consumer doesn’t share that passion.”
-Craig Merrett, co-founder of Bookah.com.au in Adelaide, Australia
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