You don’t need to have a formal business plan — but you still need a plan.
1. Not having a plan of attack.
People regard the business plan as homework they don’t want to do but planning helps. While the big-format business plan is growing obsolete, you don’t need a formal 20-page business plan to successfully plan a business. You need to know who your customers are, what you are selling and what people are willing to pay for your product or service. In addition, work out how much cash you’ve got and how long it will last.
2. Not worrying about money.
Be optimistic — just not about money. There’s a very good chance that your company will run out of money before it makes any. Know how much cash you’ve got to run your business, what your burn rate is and make sure that you have a plan to try to get more before you run out. Too often business owners scramble to raise funds when it’s already too late. Instead, founders from the get-go should create a financial plan, detailing milestones and how much money it will take to reach these goals.
3. Undervaluing what you’re selling.
Whether you’re selling a product or service, set the price at what it needs to be to make a worthwhile profit. As your business evolves continue to adjust your price points.
4. Ignoring customer service.
With so many of our business transactions happening over the Internet, it’s easy to forget that customers are people who are way more likely to return to your website if they have a good experience. Make sure you have some way of interacting with the people visiting your site — through live chat, survey, email or phone. Also, monitor social-media sites for brand sentiment and check out review sites like Yelp to see who isn’t happy with his or her experience and reach out.
5. Giving away too much and getting nothing in return.
Before you’ve established credibility as a seller or an expert, offering something for free can turn into a conversion and long-term customer, especially for those entrepreneurs focused on offering services. However, the cost of free product can add up, so think of offering something useful and intangible in exchange for a customer’s email address, such as a free ebook, recipe, instructions, webinar, guide or checklist.
6. Spreading yourself too thin on social media.
When you’re starting off with marketing and building your brand, test out one or two main social audiences where you know your audience is and can build a customized audience with a small budget. Don’t blow your advertising budget at the start.
As a general rule, Facebook and Pinterest tend to be better for product sales. LinkedIn is a better field for a business personality trying to build his or her own brand. LinkedIn is also a good place for repurposing content.
7. Skimping on early hires.
Entrepreneurs rush the hiring process to quickly fill positions in order to scale their business. But by going down this route, founders run the risk of issues down the road, including a mismatch in skillset and business needs, a personality that doesn’t bode well with the culture or a lack of commitment to the company’s mission. So, when hiring look for people who have the skills you don’t and embody the qualities you respect. The first five hires will set your company’s temperature for the rest of its existence.
8. Underestimating the obsession and drive it takes to succeed.
You’ve read a lot about the importance of work/life balance — forget about it — at least for the first year or two. Don’t worry about time. Big ideas do not come when you are trying to manage every minute of your time. They don’t come when you are multitasking. They come when you are focused on one thing. Let everything else fade to black.
9. Thinking that everything is one size fits all.
Just because a product or strategy has worked for one company doesn’t mean it will work for you. Have a healthy degree of skepticism about what you read and see successful elsewhere. If you can test your product using minimum financial and resource risk, then do so.