Do you ever feel like you’re stuck in a roller coaster business cycle, swinging between feast and famine? You’re not alone; it’s a common predicament that many business owners stumble into, and honestly? It’s exhausting! I want you to create a business where your energy can go into scaling and growing, safe in the knowledge that you’re dodging the common pitfalls that so many other business owners fall into.
We’re going to dig into the four key mistakes I see fledgling businesses making:
- Not investing in personal growth
- Relying on referrals
- Not investing in marketing from day one
- Not outsourcing early
In this post, you’ll find actionable tips for avoiding these mistakes and ensuring you know how to set your business up for success.
The False Economy of Not Investing in Personal Growth
Unfortunately, many business owners deem investing in themselves as a ‘frivolous’ expenditure, especially while their venture is in its early stages. While revenue may be limited and every dollar counts, looking at it this way often overlooks the long-term benefits of personal growth.
Investing in coaching, memberships, personal wellness, and education can be instrumental in shaping your business journey. These resources facilitate personal growth, offering fresh perspectives, expert guidance, industry trends, and even emotional support during tough times.
They say that ‘knowledge is power,’ and this is undeniably true for entrepreneurs. The more knowledge you accumulate early on, the better equipped you are to address the challenges thrown your way. So, what might seem a ‘frivolous’ expense today could actually be the springboard for your business’s success tomorrow.
The Downside of Relying Solely on Referrals
Picture this, your business is thriving on referrals from your personal and professional network. A steady stream of new clients and customers is flowing in, and your sales are doing great, all thanks to your network’s strong word-of-mouth promotion. Sounds like a dream situation, right?
Not exactly.
The fact is, relying solely on referrals for business growth is risky. First, you’re not in control of the leads. They come in when they want, and if the pipeline runs dry, you’re left scrambling to find new business streams. This is a classic feast or famine situation and can lead to a lot of stress.
Having all your eggs in the referral basket limits your reach. Just imagine all the potential customers or clients outside your network who are left untapped because you’ve been focusing on referrals. You’re leaving money on the table!
Next, most businesses that rely heavily on referrals don’t have a backup plan. When the referrals stop coming in, perhaps due to an economic downturn or a change in the market, what then? A sudden, panicked rush to market your business might be the only solution to increase sales. But, this is an avoidable crisis. You could have been gradually investing in marketing efforts to maximize website traffic from the beginning. Even a small investment can lead to consistent growth over time.
Your business deserves to reach a broader audience and to create a stable, consistent source of new clients or customers using your podcast, your YouTube channel, or your blog. While referrals are great, they should be a part of your business growth strategy, not the entirety of it. So, don’t wait for the famine to hit before you start considering other business development strategies. Diversify your approach and start marketing from day one.
The Importance of Having a Marketing Strategy
One of the common mistakes that many startup owners make is not investing in marketing right out of the gate. It’s understandable since businesses in their infancy often grapple with numerous financial challenges. However, they should also realize that without a clear marketing strategy, the business is more than likely to run into serious complications down the line.
Often, entrepreneurs have small budgets when they start out, and you might feel like investing serious cash in marketing right away just isn’t possible. But consider this without proper marketing, how do your ideal customers know about your products or services? A little investment in marketing can go a long way and potentially avoid that rollercoaster ride.
If you choose to wing it and decide to invest in marketing only when you hit a dry spell, you might find yourself in a rush to get your message across. This leads to rushed marketing campaigns that misrepresent your brand or confuse your potential customers. Even worse, it could lead to significant errors that are costly and time-consuming to rectify.
Starting small with a marketing budget and gradually increasing it as your revenue grows is a wiser approach. It gives you time to learn about effective marketing strategies, what works for your business, what does not, and how to adapt. This way, you get to increase your customer base and revenue gradually but consistently, without falling into the feast or famine trap.
Related: The Benefits of Podcasting as Your Marketing Strategy (& why podcasts outperform online ads)
Remember, marketing is like telling a story. The better and earlier you start narrating it, the more listeners (or potential customers) you attract and keep.
Why You Should Outsource ASAP
Most founders wear multiple hats. They become the product developer, marketer, salesperson, customer service, financial manager, and XYZ all rolled into one. If this is you, then you’re probably the cleaner, the garbage disposal guy, and the waiter too! While it may seem like a good way to hang onto your cash in the beginning, it has its downfalls.
As the business grows, so does the to-do list, and business owners often find they’re spending more time on tasks that could easily be delegated to others. This inadvertently creates a new full-time job for them, causing unnecessary stress and less time for strategic planning and growth activities. It’s like laying a trap for yourself and jumping in headfirst!
Here’s the deal: You can’t (and shouldn’t) do it all yourself! Outsourcing early, even the simplest tasks, can give you more time to focus on core business activities. Of course, it involves costs. But, insourcing everything has a cost, too — in terms of time, energy, and lost opportunities.
Outsourcing isn’t just about hiring other people to do tasks you don’t want to do; it’s about hiring experts in areas where you may lack expertise. This can drastically improve the efficiency and success of your business. It eliminates the burden of wearing too many hats and allows you to concentrate on what really matters — growing your business.
Related: 10 Mistakes Holding Your Podcast Back
No business ever crumbled because its owner decided to share the workload. So, consider outsourcing as your friend, not a foe, even in the earliest stages of your business journey.
Avoiding the Pitfalls
Investing in personal growth may seem like it’s financially out of reach when you first start your business, but since your mindset and daily routines directly affect the business’ growth, avoiding development in these areas hinders you from fulfilling your vision. Investing in coaching, personal wellness, and education always pays off in the long run. Being a solopreneur can be tough; investing in yourself is investing in your business.
A word of caution, though, don’t overextend yourself. Your time and energy are limited, and outsourcing tasks early on helps to save time, manage work efficiently, and focus on key business operations.
Likewise, underestimating the importance of strategic marketing from day one limits a business’s potential to scale beyond its existing network and leads to a feast-or-famine sales cycle. Every business owner should start with a realistic marketing budget to avoid having to create rushed, ineffective campaigns later on. Start small and increase the budget progressively as your profits grow.
Common Business Mistakes FAQs
What do you mean by investing in personal growth?
Investing in personal growth refers to the efforts and resources an entrepreneur spends on their professional and personal development. This could be educational workshops, coaching, wellness programs, or memberships that allow them to hone their skills and mindset further. Money mindset, ingenuity, mental space, and physical/emotional well-being are crucial aspects that positively affect the growth and expansion of their venture.
Why is relying on referrals risky for a business?
Relying solely on referrals usually limits a company’s reach to a small, localized customer base and inhibits growth. Also, this method can lead to unstable sales patterns, often referred to as ‘feast or famine’ cycles. Investing in marketing from the onset is important to broaden reach, expose the business to new markets, and achieve consistent growth.
Is investing in marketing from day one really that vital?
Yes, it is. Having a strategic marketing budget from day one aids business visibility, creates a stable consumer base, and ensures consistent and sustainable growth. It helps avoid rushed and ineffective marketing campaigns that could detrimentally affect a business’s reputation and waste resources.
What benefits does outsourcing offer to a business owner?
Outsourcing helps business owners manage their time and resources efficiently. It allows them to delegate non-core tasks, minimizing the risk of burnout and giving them more time to focus on strategic decisions that drive the growth of the business. Through outsourcing, businesses can also access skills and expertise that they may not have in-house.
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