Six mistakes most entrepreneurs make during their first year in business
I have been self-employed for almost two years, and it has not been easy at all. I used to believe that once I get to manage my own schedule and do my own thing I would be a happier person, I would feel more accomplish and well! as the saying goes
“Working for something we don’t care about is called stress, but working hard for something we love is called passion”
and so, for me working in a company where I was underpay despite all my efforts to show how much of a valuable asset I could be, was really stressful. I was thinking: – If I put all of my efforts working on my own, I’ll be more satisfied even if i have to struggle at the beginning.
And so I started my journey, I got all my savings together and started looking for a place where I can begin working, during that time I had very close friends that were interested in partnering with me, the 5 of us got together with our bag of dreams excited to show the creative world what we could do together. The place we got was really affordable for the area but it was a wreckage, so we decided to change the floors, demolish, patch and paint some walls and started putting together all the furniture. Little by little our studio was taking place, we had some clients from our previous jobs, and we were doing pretty good.
But here is where I was wrong and started making mistakes. When starting the company it is very unlikely that you will have any profits during the first 3 years, that means that all money you are making during those years is going to cover expenses and serve as an investment in bringing continuous business. With that said, imagine everyone’s frustration when we couldn’t pay them a salary? Obviously they started walking out, and it was very understandable we all had to eat.
So within the first year we went from having 5 people working together to 2. We were not investing on bringing business, we spent months working on a portfolio, because we never had enough time, or were able to afford working on our own stuff knowing that we had to make the money. All of our time was consumed working on our clients’ projects and we were working from morning to almost midnight including weekends. Exhaustion was knocking at our door, and we were barely covering expenses. We had to make a change, before we let discouragement win.
So here is what i think was the mistake I would advise everyone to try to avoid.
1. Avoid unnecessary expenses: Like getting an office, if you don’t need an office and you can work from home DO IT! Designate a space in your home where you will be working even if is not a whole room. If you can work from your dining table and avoid the expenses that having an office involves, do it. Office expenses include: Rent, utilities (FYI Internet is always more expensive when it’s for commercial use) supplies, snacks & meals, software, hardware, professional services and more. Another unnecessary expense is hiring employees, if you can avoid hiring do so, work with freelancers, use interns, subcontract other companies but do not pay salaries if you are not getting one for yourself first.
So in order for us to cut expenses and re-consider our business plan we moved out of Miami. This was one of the main factors why we move to Georgia, we always wanted to try living outside Florida and at the beginning of this year we made the move. We got out of the office lease (it wasn’t easy after the money invested), and started working from home. Our expenses have decreased noticeable on meals, utilities, rent and we even have now more time to invest working on our own brand, more flexible schedule and when we need to meet with clients we use co-working spaces. Furthermore, you can still deduct part of your home’s rent for office purposes on your tax return.
Now let’s hear some other common mistakes from these amazing lady entrepreneurs that are on the same boat.
2. Doing Everything all at once: My biggest mistake when I started my business was thinking I needed to do everything all at once. Take small steps and take small bites. You need to start with a foundation of getting the basics covered, then move to all the fluff.Don’t start with the fun fluff and then find out later you didn’t set up all the important foundations for your business like a brand, a logo, a business plan, a company business banking account. These are things that help you not have to double back and start over. Serious businesses plan for serious business. If you build it, they really will come because they will take you serious from the start.
-Sasha Sweder @poshswederside – www.poshswederside.com
3. Setting goals properly: My biggest mistake during my first year as an entrepreneur was not understanding how to set my goals: I was thinking about goals that were either not attainable or not measurable, and also not defining a timeframe to achieve them. This made me think that I was failing, and pushed me to move from one task to another whenever I found an obstacle and not really completing anything.When you’re starting out on your own business, you need to understand very clearly what you need to do and when it needs to be done. Set goals, break them into smaller tasks (as small as you can) and define a due date. Think about what your milestones are, how to reach them and when. Identify what success means for each goal or task and how you can measure it. That way, you’ll know if things are getting done or not, and if they’re getting done on time. Completing tasks and achieving goals will give you the motivation you need to keep going.
-Valeria Pacific – @okama_uk – www.okama.tictail.com
4. Investing on Advertising: I started my online letter board shop back in January, and then started receiving and fulfilling orders in April when my stock had been manufactured and arrived with me.One mistake I had made early on – that I’m trying to do more of even now – is to enlist the help of awesome IG accounts that have a large reach. Loop giveaways and collaborating with large accounts is a great way to grow your own account and get exposure, and I wish I had put more work into that initially. It can seem scary to give away and ship so much free stock, but I’d say account for at least 10% of your stock to use just for advertising purposes. Giving away $100 of free product is still a really great price for advertising with good reach. I’ve had to stretch and have boundaries with this, though, as I get multiple requests in a week from small accounts for free product in exchange for exposure; so another piece of advice I’d give is to be okay to hold out for the large, beautiful accounts with large reach, and be able to say no to the small ones who reach out, no matter how nice they are. $100 in free product can either buy you 10K reach or 100K reach; it’s obvious which one makes more sense!
5. Stand out from the competition: My shop has been open for a little over a year. Over the last few months, I have gone from just a handful of sales to 60 sales and counting! The biggest mistake I initially made was not focusing on what makes my product stand out from the competition. In a highly saturated market, my product was just one of thousands of similar items. I started thinking like a consumer and focusing on what would set me apart. By added my “fast shipping” time as a selling feature, my sales took off!
-Christy Roy – @wickedcutehats – www.etsy.com/shop/wickedcutehats
6. Be patient – Everything takes time: When you start an endeavor it is normal to make mistakes along the way, but the clue is not to be afraid of making them, this is how you learn. My most frequent mistake in this process has been wanting to make everything happen fast no matter how successful it might be or not. An example to be more clear is that every year I come out with a new collection of products regardless of whether everything is going to sell or not, what I cared about was simply to see them come a reality, no matter what. The good thing is that I have learned to be more calmed and spend more time making things that have a more effective result.
-Melina Velez – @mujerinspirate – www.mujerinspirate.com
Although we are all still in the process of learning and leading our businesses forward, we have had some lessons already and we wanted to share them with you. Each one of these ladies are trying to make an impact with their work and we hope that if you are an entrepreneur as us, you might feel identified with any of these mistakes, or if you are starting your own venture and you find yourself on this road you can learn from us, and avoid them.
Overall I want you to take from this that you need to enjoy what you do as an entrepreneur, the moment you stop enjoying it, It becomes a chore and you will feel like a failure. Always remember Collaboration over Competition is far more valuable. This is your passion, find a purpose on what you do, and don’t give up, even when you find less people rooting by your side for you to make it than those expecting you to fail. It doesn’t matter!
“Keep hustling, until your haters ask if you are hiring”.