You’ve finally decided to start your business. That’s a great start, and in the modern era, we have all the information we need at our fingertips.
I’m all for it, the courage, the vision, the passion.
However, starting and running a business is not a walk in the park. A new business comes with its own share of challenges.
According to the Bureau of Labor Statistics, 20% of small businesses fail in their first year, 30% fail in their second year, and 50% fail in the first five years. Additionally, 70% of small businesses fail in their 10th year, as reported by Fundera.
It’s even harder for women entrepreneurs. A whopping 88% of all women-owned businesses generate less than $100,000 annually. Additionally, only 4.2% of women-owned businesses generate more than $1 million in revenue.
My business was designed to inspire, encourage and teach women as much as I can on all things lifestyle and business in the modern era or sometimes better known as the digital age. Every year I see more and more celebrations during Women’s History Month – a reflection of how far we’ve come in all facets of life.
Although Women’s History Month has come to an end, we still want to take the opportunity to reflect on the progress that has been made toward gender equality, and recognize the contributions of everyday women who have made a difference in their communities and beyond. Despite the strides that have been made, we must also acknowledge the challenges that women still face today. Women continue to be underrepresented in leadership positions across many fields, and on average, they earn less than men.
But don’t let that scare you. In fact, it doesn’t: Women launch more than 1,200 new businesses every single day in the US.
As a business owner myself, I celebrate our courage.
Contrary to what our modern social media-driven era might show, women don’t just start businesses to buy luxury handbags or luxury travel. In reality, they do it because they want to:
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- Pursue their passions! This is the primary driving force for women who enter the field of entrepreneurship, with almost half (48%) citing this as their main motivation. Many women start businesses because they are passionate about a particular product or service and want to turn that passion into a career.
- Achieve financial independence! Following closely behind is the desire for financial independence, which was reported as the main reason by 43% of women. Starting a business can be a way for us to achieve financial independence and create wealth for ourselves and our families.
- Challenge gender norms! Starting a business can be a way for women to challenge traditional gender roles and prove we are just as capable as men at running successful businesses.
- Make a difference in our communities! Many women entrepreneurs are motivated by a desire to make a positive impact on our communities, whether by providing employment opportunities, supporting local causes, or promoting social and environmental sustainability.
- Build a legacy! Women who start businesses may be interested in building a lasting legacy that can be passed down to future generations of their families.
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Did you know that –
Approximately 80% of them hold college degrees. However, due to the significant amount of time required to build experience, only 30% of these women are under the age of 40. This underscores the dedication, commitment, and hard work that is necessary to establish strong connections, relationships, and capital in order to effectively run a business.
Over the past 45 years, the number of African-American women who open new businesses has increased by almost 163%, with 260 women launching new ventures every day. This is a remarkable statistic, particularly given that women of color comprise 39% of the total female population in the United States. Additionally, according to statistics on women of color entrepreneurs, businesses owned and managed by women of color generate approximately $390 billion in revenue.
The latest statistics on the growth of minority women entrepreneurs indicate that approximately 1.9 million firms in the United States are owned by Hispanic women. This suggests that they are making significant contributions to the economy, having employed over 550,400 workers and generated roughly $97 billion in revenue. According to 2020 statistics on female entrepreneurship, if the proportions of Hispanic women business owners were to match those of other female entrepreneurs, they would have the potential to create 80,000 new job positions and generate approximately $155 billion in revenue.
Are some of these stats surprising? I certainly was surprised.
Since most business owners fund their businesses from personal savings, we don’t have the luxury to blindly make mistakes that will keep us from reaching our business goals.
Come with us as we explore some mistakes you should avoid when starting a business.
1. Starting before you are ready.
You ever walk into a coffee shop or restaurant only to be told there is basically nothing available from the menu options? You wonder why they opened in the first place.
Just start even if you are not ready. This is what many entrepreneurs will tell you. They might be right to some extent because you may never feel ready to start your business. However, starting a business before you are ready can also be a costly mistake that could send it packing. There is a difference between fear filling you up with imposter syndrome and you actually not being ready.
Lack of preparedness can result in you making wrong decisions and committing mistakes that will cost you heavily financially and in terms of time. It also may create a situation where you are constantly forced to use your personal finance for business operations. This may deplete your funds, leaving you unable to cover your basic needs. Consequently, the inability to meet your basic needs will send your mind into survival mode leading to anxiety, stress, and depression. Research shows up to 72% of entrepreneurs suffer from mental health issues, including stress, depression, and anxiety. To curb this, ensure you are prepared and look into setting aside funds to finance your business operations when it cannot support itself.
2. Not having a job or source of income.
I understand your excitement about starting a business and getting on it full-time. However, don’t rush to quit your job unless you have a plan. Remember, a business can be unpredictable at times. You may make lots of sales today but absolutely nothing the following day. So, what happens when things seem to dry up all of a sudden? For your business and sanity’s sake, it’s essential to have a job or another source of income to fall back on when your business seems stuck. This will give you peace of mind knowing that your basic needs are covered. Better still, you can use this to give your business a boost. That makes sense, right?
3. Not looking up the business name.
You don’t want to be involved in legal issues over a business name! Losing all the time and effort, the branding you may have invested in with the perfect design for your name. Be extremely cautious while selecting a name for your business or brand. Ensure no other company is registered under the same name you intend to adopt. You can look up the name in the United States Patent and Trademark Office or search it on Google or other social media sites. If the name appears, drop it off and create a new one. You can also hire a lawyer or utilize various state-funded resources to help you with trademark issues.
4. Using a confusing name
Using a complicated name for your business may seem trendy, but it’s a bad idea. You don’t want your potential customers to get confused while searching for your business online. You also don’t want to keep correcting the misspelled name all the time. As such, go for simple but memorable names and keep off names that are hard to spell or remember. Ensure that the name you go for reflects your desired business image and long-term goals.
5. Not thinking about offers to sell before all else.
Remember, the reason for starting a business is to sell. While a beautiful and perfect design is good, making a sale is more important. You should thus identify the products you want to sell and launch them before your competitors do. If you take too long thinking before launching, some of the products may become obsolete, or worse still, potential competitors will start selling them before you.
6. Not beta testing.
Before settling for a product to sell, you’ll need to conduct market research. What seems like an excellent business idea may be an unideal business. Instead, validate your idea by researching the market to determine if enough customers are willing to buy what you intend to sell and if they will pay enough to make the business profitable. Market research lets you better understand your customers’ needs and where to find them. You can start by asking people about their needs in the niche you are interested in.
7. Treating business like a hobby.
Your business is not a hobby you attend to only when you feel like it. It’s a full-time job that requires dedication and hard work to be successful. It would be best if you thus treated it with the seriousness it needs. You’ll need to give special attention to every aspect of the business. Don’t assume that sales and profits will automatically come once you have started a business. You’ll have to work hard and smart to achieve success. Don’t allow unnecessary tasks or things to take away the time meant for business. Let your family and relatives know when it’s business time to avoid unnecessary interference.
8. Avoid looking at money. Finances!
Is your business making money? And how much is it bringing in? After all, the only reason you started it in the first place is to make money. Since you put money into the business, you naturally expect it to bring in money, right? The business should make enough to sustain itself and pay its expenses, including you. Rather than shying away from it, you should thoroughly analyze your business and get to know how it’s doing financially. You’ll need to re-evaluate your strategies to turn things around if the business is not making money.
9. Wanting to do everything yourself.
How do you do everything by yourself? You simply can’t. Many diverse responsibilities are involved in running a business, no matter how small, and no one person can handle all these tasks single-handedly. No matter how talented or well-equipped you are with all the necessary skills to excel in any task you put your hands to, time will still be an issue. You’ll be lucky to get all you’ve planned done by the end of the day. As such, getting all the help you need from the word go is important. Learn to delegate, hire, or outsource the necessary skills to enhance the chances of your business succeeding.
10. Lack of planning.
Failing to plan is planning to fail. Every successful start-up requires a business plan which lays out the business goals. A plan will help you maintain consistency and stay in focus on your initial goals. Coming up with a plan is an assignment nobody wants to undertake as it’s considered boring and complex. Well, it doesn’t have to be incredibly detailed or exceptionally lengthy. You don’t need a 20-page plan to plan a business successfully. All you need to do is:
- Find out and outline who your potential customers are
- State what you are selling
- Find out how much the customers are willing to pay for your products or services.
11. You need to have or develop Grit.
For you to succeed in business, especially as a woman entrepreneur, you’ll need to have or develop Grit. No matter how talented or smart you are, without Grit, all these will go to waste. But wait, what’s Grit?
Grit is the ability to persist in something you are passionate about or persevere when obstacles come your way. It allows you to continue working hard even after facing difficulties or obstacles. You’ll need the Grit to drive achievement and success.
12. Mixing personal and business money.
Combining your personal and business finances is a bad mistake, leading to confusion. It’s best to keep personal and business money separate. Besides making you appear professional, opening a separate bank account for your business offers other benefits like:
- Avoiding suspicion from local or state tax bureaus
- Makes it easier to keep track of your business revenues and expenses as they are not mixed with personal incomes and expenses
- Allows you to keep everything related to money made/used for business, making it easy to be audited by the IRS
- It helps convince the IRS that your business is legitimate and not just a hobby.
13. Thinking friends and family are, or have to be, clients.
Your friends and family do not necessarily have to be clients. Do not feel bad if they don’t purchase from you. There are so many other ways they can support you. It’s good to understand that support is one thing, and becoming a client is different. You should also learn to separate personal issues from business issues. Your family and friends may not understand that business is business and not an extension of your relationship. They can support your business by offering moral support, encouraging you to go on, and cheering you on.
14. Wasting time with false collaborations.
Time is extremely valuable to you as a business person. You should thus use every second to contribute to growing your business. Do not waste time in collaborations that offer your business no benefit. You’d better spend that time developing strategies that promote your business. Walk away from collaborations that expect you always to offer freebies while you get nothing in return. On the other hand, don’t get into collaborations expecting to get free stuff. Realize that every relationship is a give-and-take affair. Before getting into any collaboration, ask yourself what value you are offering and what you are getting from others.
15. Not having a support group, mastermind, etc.
While you may think doing it alone will take you far, having a support group is what will steer you to success. All successful entrepreneurs build a network of like-minded people to help them with business. A support group will push you forward and encourage you to go on even when things become thick. Take time to build a strong support network of people with the same experience or those who can mentor you. These can include successful entrepreneurs, retired business people, or even professionals like lawyers and accountants. Through a support group, you’ll get sound advice on matters of business and important lessons from people who have done it successfully.
16. Be careful about emotional hiring.
Uh, this caught you by surprise, I know. But hiring based on emotions can be a grave mistake for your business. While getting moved by peoples’ stories during interviews is possible, ensure you don’t hire based on sympathy. Once their issue gets sorted, they may forget what they came to do in the first place. You should properly evaluate every team member you intend on bringing into your business to ensure they are fully qualified and capable of carrying out their duties. This will ensure that everyone adds value to the business. Separate emotions from business.
17. Expanding too quickly.
It’s easy to get tempted to expand your business immediately after it becomes profitable. After all, who doesn’t want their business to grow? However, when that growth comes too fast, it becomes a problem. Don’t make expansion decisions based on a spurt of good results. While the growth and expansion phase is usually exciting, expanding too quickly can harm your business. Besides putting a strain on the cash flows, rapid growth may result in operational inefficiencies as it will cost time, money, and other resources. Your staff may get overworked in the process leading to poor performance. Consider growing your business slowly and steadily for the best results.
18. Not creating a marketing plan.
A solid marketing plan is crucial for getting your business off the ground. After you have identified a problem you want to solve, the product you desire to offer, and validated your target customers, you’ll need an effective plan to get your products and brand out there. If your potential customers don’t know about your brand’s existence, they won’t buy from you. How do you intend to get that first customer? You should therefore develop effective strategies to ensure that you get customers. You’ll need to come up with plans covering initial customer acquisition, ensuring customer satisfaction, and how to convert your customers into brand ambassadors.
19. Underestimating the demands of business ownership.
Running a business is not easy, as it comes with several demands regarding resources like finances, time, and human resources. Even the most successful business people don’t speak about the difficulties and the obstacles they face before they achieve success. While it is possible to become successful in your business, the truth is the journey is not easy. It’ll cost you lots of time, money, and effort. Ensure you are ready and fully prepared to tackle a business’s demands. With the right mindset and consistency, you will be successful.
20. Not understanding what you’re actually selling.
How will you get your products known if you don’t know what you are selling? It’s impossible. For your business to be successful, you’ll need a complete understanding of what you are selling to create a compelling and unique proposition. When you understand your products well, you will be able to come up with a proper marketing message and product description that will help you convert your potential customers into buying customers.
21. Not taking the time to find the right brand consultant for your business.
Hiring the right brand consultant can be a crucial factor in the success of your business. A brand consultant can help you develop a strong brand identity, create effective marketing strategies, and position your business for growth. On the other hand, working with the wrong consultant can result in wasted time, money, and resources, and can even harm your brand’s reputation. Therefore, it’s essential to do your research and find a consultant who not only has the necessary skills and experience but also shares your values and understands your business’s unique needs and goals. Ask yourself, have you seen the work the consultant has previously worked on?
Over to You
Starting and running a new business is not easy. Don’t get discouraged because you encounter some challenges and make mistakes. I don’t think there is one successful business out there that has not made them. It’s how you handle the mistakes and challenges that determine if you succeed or fail. After all, we all learn from our mistakes. Decide you will never give up.
This blog is not meant to discourage or scare you; on the contrary, it’s meant to encourage you and empower you to learn about some things you can avoid in order to give your businesses a better-winning shot. I’ve certainly guided many clients in preventing the use of names they would later be barred from using.
I have vast experience in working with new entrepreneurs and business owners that want to use the tools available in our modern era. I’ll help you identify your business essentials and improve your entrepreneurial mindset so that you are not only up to speed with creating your new business or optimizing it (for the world today) but also confident when you face challenges. Book your free call today.