How to avoid the 10 biggest regrets of business owners – before it’s too late!
Planning to start a business? Or in the early days of launching one? If you want to give you business the biggest chance of surviving, we recommend avoiding these 10 common mistakes.
Hitatchi Capital recently surveyed 1,000 business owners to identify what UK SME’s view to be their biggest mistakes. These are the mistakes that made the top 10:
- How I financed the business – 23%
- The pricing strategy during start-up – 21%
- Taking advice from friends or business gurus – 17%
- The time I started my business – 16%
- Lack of planning before start-up – 14%
- The location I started my business – 11%
- The products I sold – 10%
- Hiring the wrong staff – 8%
- Starting a business in the wrong sector – 6%
- Not putting my all into the business during start-up – 4%
So how can you avoid the same regrets? Here’s our advice for each of the 10 regrets.
1) How I financed the business
While some businesses (like our own) can be bootstrapped, others require financing – either to launch or to grow. And it’s essential that you choose the type of funding (and funding provider) carefully.
If you’re looking for financing, you’ll find advice in these articles:
- Need finance to fund your startup or growing business? Here are your options
- Five ways to finance your business start-up
- Why female entrepreneurs find it harder to get business financing – and who WILL help you
2) The pricing strategy during start-up
Pricing can make or break your business. Charge too much and you’ll put off customers. But charge too little, and not only will you also put off customers, but even if you do sell, you risk making a loss.
To help you master this essential area of business, we’ve recorded a Pricing Masterclass. In this class you’ll learn:
- Why changing your pricing by just 1% can impact your profit by 11%
- The five pricing myths that are costing you money – and the five real truths
- Why you need to work out your ‘transaction price’, and how to do it
- How to put an accurate value on your own time
- How to work out your profit margin
- Why all customers are not equal (and which ones to focus on)
- Why discounting is a luxury you can’t afford (and what you need to do if you DO discount)
- How to handle two common objections to buying
- How to stop crossing the line with your pricing
- The important pricing lesson you can learn from a famous brand
- The four factors you need to consider when calculating price
- How to raise your prices with existing customers
- What you can learn from the gardener’s story
- Mindset tricks to stop you undercharging – and feel okay about raising your prices
(After watching this class, one business owner increased the price on a quote by 60% – and got the job!) You can buy the class here.
3) Taking advice from friends or business gurus
Running your own business can be lonely, and often requires skills you don’t yet have. It also means making daily decisions that often, with no experience in that area or guarantee of an outcome, are made by guesswork.
So no wonder that we canvass the opinion of others to help us make a decision. And, while asking the right person can be beneficial, following the advice of the wrong person can be expensive.
A few years ago we wrote about the six figure con – business gurus who promised easy answers and wealth (as long as you bought their programmes).
Since then, this industry has exploded. Almost weekly we see a new six (or even seven) figure coach touting their wares, and promising to show you how they earn their passive income.
Please be wary before paying any money to anyone for business coaching or advice. Do your research, and don’t get sucked in by attraction marketing (showing off an enviable lifestyle), big income claims and emotional manipulation.
Since publishing our article, we’ve heard from MANY women who have lost significant sums of money to people selling courses, masterminds and membership programmes. People who seem genuine and lovely… until you question whether you’ve had value for money.
When this happens, these victims are bullied into silence. Sadly, this means that these gurus are still out there, peddling their programmes to more innocent victims.
The truth is that many of these gurus have bought their success. They’ve invested tens of thousands of pounds or dollars in high-end programmes that teach them how to sell. And that’s all. Few of these people have ever actually built and run a profitable business themselves outside of coaching (despite their marketing claims).
So be very wary before you part with any money for business advice or coaching.
4) The time I started my business
When IS the right time to start a business? This is purely down to each individual person and business.
If you’re too early on a trend, you could work hard to convince people to buy with little luck – doing all the hard work selling the concept of what you do, as much as your particular product or service. Too late, and you’re left as a me-too competitor trailing behind the people who were in first.
But trends aside, you need to identify when it’s right for you to launch your business. Here are some clues you could be ready:
- You’re frustrated with your current professional situation and keen to change.
- You have the time, headspace, opportunity and energy to really give your business your all.
- You’ve identified a gap in the market or problem that is crying out to be solved, and have the ideal, skills or resources to solve it.
- You have a clear business concept and have written a business plan.
5) Lack of planning before start-up
We’ve just touched on this above. We see too many people launch enthusiastically into their startup without having done their homework first.
They haven’t researched their market or their competition. They don’t have a clear USP. They have no realistic idea of what it will take to bring their business to market. And they have no financial plan.
Starting a business without a business plan is a bit like setting off on an overseas adventure with no idea of your destination, no research into the weather or culture, no map, guidebook or translation guide, and no local currency.
You’re heading into your adventure essentially blind, and any success you may have will be largely down to luck.
But who wants to pin their business hopes to luck? If you’re serious about making a go of your business, plan it properly and carefully first. Then make calculated decisions going forward – decisions that are more likely to see you build a profitable business that grows over the years. (And one you actually enjoy running.)
You can find many free business plan templates online. Or you can buy our Business Plan Masterclass in which we guide you through the process (you also get a copy of our business plan template if you wish to use that).
6) The location I started my business
If your business is a bricks and mortar operation, then your location is essential. A cafe, bar, restaurant or shop will rely to some extent on footfall, which means that any passing trade needs to fit your demographic – there has to be enough passage trade to sustain your business too.
You also need to be in an area that your ideal customer wants to visit and finds easy to get to.
If you need a manufacturing or production plant, you need to find somewhere with good transport links, and affordable rent, rates and local business taxes.
But what if you’re not a bricks and mortar business? You may well be starting a business from your home, or renting a local office space. Your choices then will be where you work most productively, and what you can afford.
You may find it worthwhile looking at cowering spaces. These give you a community, space to work, and can often help you work more productively than you do at home, with distractions like housework and people calling round.
Over the past few years the number of coworking spaces has increased, and now most towns will have at least one. They’re modern, well-equipped and often have office space you can rent for meetings. Most also offer a range of packages, and you can use them without needing to commit to a lease.
7) The products I sold
Again, this mistake can be solved by thoroughly researching your business before embarking on it.
Market research is an essential part of planning your business. It’s all too easy to believe a product will fly off the metaphorical shelves because you love it. But just because you think something is a good idea doesn’t mean that everyone will. And even if others love it too, it doesn’t mean they’ll actually buy it. At least from you.
So before you launch enthusiastically into your business, research your product and market carefully. And pay particular attention to your target audience: the more you know about your customers, the less guesswork you’ll need to do in working out what it is they need, want and will buy.
8) Hiring the wrong staff
Hiring the long people to work in your business can be a very expensive mistake. So don’t just hire on gut feel or hire too rapidly.
To help you make the right recruitment decisions, we recommend reading these articles:
- Five HR tips to help you hire the right people
- Need help with your business? Seven tips to help you hire the right people
9) Starting a business in the wrong sector
Again, this mistake can be avoided with proper business research and planning. Sometimes, in the process of researching your business plan, you can realise that your amazing idea actually has no legs; that’s it’s not practical or viable in the real world.
While it’s disappointing to have your dreams squashed at this stage, it’s far more preferable than investing time, money and hope in your business, only to discover it never had a chance of making it.
And all isn’t lost. During the process of researching your initial business idea, the real business concept can sometimes emerge. So you start your research with the aim of starting one business in one sector, and can end up launching a completely different business in another sector – but one that could actually succeed.
10) Not putting my all into the business during start-up
You only get one chance at starting your business. So make it right.
Putting your ‘all’ into your start-up doesn’t just require an investment of time, money and energy. It also means giving it every shot at success. And sometimes your ‘all’ means being patient and following each proper step – however keen you are to get to the actual selling of a product or service.
Planning a successful business can take time and require thought, but missing out this essential step (as you can see from the number of times this has come up!) can doom your business to failure from the start.
So make sure you give your business every chance of success (aka your ‘all’) by planning it properly before you launch it.
Don’t leave your business success to luck
Pretty much every business owner you meet will have some regret about the way they started their business. And if they were to turn back the clock and start again, they’d do some things differently.
Tis is normal; it’s all part of the learning process that comes with gaining experience.
But while some mistakes or learning curves are inevitable, others can – and should – be avoided. Especially mistakes that sabotage your business’ chance of success.
So don’t leave your business success to luck. Take heed of these 10 business regrets and do all you can to ensure that you avoid them. And instead, start and grow a business that has a healthy chance of going the distance.
Photo by Anthony Tran