We all make mistakes, that’s how we learn and grow (especially in business). So while failing and making mistakes is a good thing, there are some lessons that are very costly. Some mistakes are so costly that they can cost you your business.
As the saying goes a smart man learns from his own mistakes, a wise man learns from others’ mistakes.
1. Not Knowing Your Numbers
Starting a business can be a lot of fun! Unfortunately, sometimes in the fun and the rush to get started first time entrepreneurs and business owners skip over some of the most important fundamentals. It’s been said that accounting is the language of business. That’s why it’s important that you speak the language otherwise it’s going to be difficult to understand what your business is trying to tell you.
Getting a firm grasp on some basic accounting principles will help you manage your business better. It can help you manage your cash flow and stay agile. Both of these are essential for a small startup to succeed.
2. Growing Too Quickly
Growing too fast has been the death of countless companies. “Going all in” on your business is a great way to grow the business and your skills as a business person but that doesn’t mean operating your business recklessly. Successful businesses pace themselves properly.
If you hire on employees too quickly or hiring the wrong people because you were in a rush will end in heartbreak for everyone. Being a business owner is a huge responsibility. You’re not just responsible for you and your company, you’re also responsible for the employees you bring on.
Make due as long as you can before you start hiring by outsourcing what needs to be done. There are freelancers for just about every area of business (especially ecommerce) these areas. Instead of bringing on a whole warehouse team that you need to downsize seasonally, outsource that job to an order fulfillment center. You’ll find that this is a much better option than taking the time to hire, on-board and then fire employees time and time again.
3. Not Knowing Your Customer
Many entrepreneurs go into business with dollar signs in their eyes. Maybe that was you too. But when starting your own business you can’t just go in blindly expecting customers to come flocking with open wallets. The best way to make money is by getting to know your customer first.
It’s easy to forget that you work for your customer when you think you have an amazing idea and just want people to love it no matter what. Paying attention to your customer and getting to know them and their needs allows your customers to tell you what they need instead of the other way around.
In the end deeply knowing your customer allows you to create a product and brand that people are actually in demand for. Generating demand for a useless product is much more difficult and far less successful.
4. Not Having a Plan
One of the worst things that any new entrepreneur can do is to jump into a business without a plan. That doesn’t mean you need to sit around planning forever because too much planning can mean that you’ll never see your business come to life. No plan at all, however, is just planning for failure.
Going through the steps of creating a business plan can help you to see the weaknesses and strengths of your business idea. What you might think is a brilliant, unique idea might actually be in a very competitive market. A plan will help you be prepared for what lies ahead instead of letting it surprise you.
Many entrepreneurs think that they don’t actually need to write up their business plan, that it’s only for people looking for funding or investment. In reality every business needs a plan. The plan is for you and remember that it will help you reach success, it isn’t meant to be an obstacle. If you’re too lazy to do the research and put together a business plan, there’s a chance that your company won’t survive the challenges ahead.
5. Getting Overwhelmed by Order Fulfillment
As an order fulfillment company, at Ship Central Fulfillment we see a lot of small businesses and startups that nearly fail because they’re trying to do it all themselves. They get overwhelmed with order fulfillment which eats into their other tasks that add value to their company.
Teaming up with an order fulfillment company allows you to focus on what’s really important to growing your business. Order fulfillment is usually at the bottom of the “important things to-do list” but it’s at the top of your customers priority list. And like we said earlier, you work for your customer.
Many new entrepreneurs think that you have to be a big company with hundreds or thousands of sales each day to afford order fulfillment but that’s just not true. One of our specialties is working with small startup businesses. We take care of their order fulfillment and they concentrate on what needs to happen to keep growing.
The Takeaway
There are so many lessons that you’ll have to learn as a new business owner but there are some common ones that you can avoid. By side-stepping these major speed bumps your company can grow so much more quickly than if you learn the lesson first hand.