This article will outline the 5 most common mistakes made by new or aspiring entrepreneurs that cause their business to fail. This applies to all industries, not just online businesses.
SummaryTreat your business like a magic cash machineFalling for shiny object syndromeThinking about taxesThey think their business is great, but their customers don'tThey "eat McDonald's"
Seriously. I see it all the time. Most people who say they want to start and build a new business aren't looking for it at all. Instead, they just want a magic money vending machine, where if they put in $100, they'll get $200 back. But oddly enough, it doesn't quite work that way.
Here's how it works:Most companies take at least six months to make a profit. Six months! Why the hell would that take so long you might ask. If you want money right now, I'm sorry, but that's extremely unlikely because, you see, a business isn't some ambiguous thing you do "make money"
A successful business is when you do these three things right:
And there's a learning curve to getting good at those three things. Some people are geniuses at doing them naturally, but like most things in life, the majority of us will have to learn through education and experience.
If you choose to live in a fairy tale land where you have unrealistic expectations of overnight success, you can expect a 99.9% failure rate.
I know this is a mistake I definitely made when I started out as an entrepreneur.
If you fall into shiny object syndrome, all of your endeavors will almost certainly fail and why we just need to do some quick and simple math.
You only have 24 hours a day. Most of you will spend at least eight hours at work. And then you'll spend at least an hour commuting and getting ready for work after sleeping for eight hours, which leaves you with only seven hours a day, which isn't a lot of time. But those seven hours you have to cook, clean, help your friends and family, manage your life and have free time too, so you don't go crazy and burn yourself out.
Most people will realistically have 1-2 hours per workday to work on their new business and obviously with weekends you have a lot more time. Maybe you were very disciplined and prepared to work eight hours a day. This means that for most people, you will probably have around 20-25 hours per week at most on average to work on your new business.
Now consider that one of the business models we recommend at SaleSource is to open an online store and then drop-ship products there (through the Shopify platform). Usually, I recommend most new store owners to spend at least 15-20 hours a week on their new business and that's actually less time than most other business models, due to the fact that this one- it is semi-automated. However, it is worth mentioning at this point that there is no substitute for hard work and dedication and you should always conduct shopify product research to find the best products for your store.
See also:Best practices for a successful dropshipping business
So think about it. If you try to start 2,3 or 5 businesses, you will literally run out of time to start one of them. So pick a company and stick with it.
I recently received an email from one of my customers who was watching a video about drop shipping and taxes.
I hate taxes too, almost no business owner I know likes to think about taxes and one of the benefits of working regularly was that I literally didn't have to think about my taxes. Here in the UK, if you normally work from 9am to 5pm through a system called PAYE, the government will remove the tax from your paycheck for you.
So by quitting my job and becoming an entrepreneur – managing my tax returns is now a new burden for me. But you know what else I have, I now have the freedom to no longer be chained to my desk job. With the passive income I've built for my businesses and no longer needing to trade my time for money - I'm fulfilling my lifelong dream of traveling the world in business class and first class , since I no longer have a salary to cap my income. Of course, I have to spend one or two days a year working with my accountants to make sure my taxes are in order. But you know what? I think it's a sacrifice I'm willing to make.
Here is an email I recently received from my client. He had just started the new business and online dropshipping store and wanted me to give him feedback now when I saw that his store URL literally had his name on it I realized that his store was clearly not set up to serve customers. It was set up to help itself and in reviewing the store, that's exactly what I found.
The store was and still is to this day simply a collection of random products that the customer in question likes and is interested in. This store is definitely one of the most interesting stores I have ever seen. It was ugly then and it's just as ugly now, but I'm not surprised because he built the store with himself in mind and that makes it much harder to be objective.
Why? Because most of you reading this, myself included, suffer from delusional superiority – a cognitive bias that makes us think we are superior to others. Another name for this is the Lake Wobegon Effect – named after the fictional town of Lake Wobegon where it is said that all women are strong, all men are handsome and all children are above average . You may have noticed that almost everyone you meet will say they are an amazing driver and everyone else is terrible. So if you've ever wondered why everyone thinks that, now you know.
Unfortunately, the Wobegon Lake effect means that it's actually quite difficult for us to be really objective about the things we create and do, which is why analytics data can help us.
See also:How to Build a Winning Business Strategy in 5 Easy Steps
A few years ago, my friends started a successful new business in beekeeping and honey. They are an impressive example of a millennial peer who hated their 9-5 life and acted to change it. However, they have recently suffered a lot from lack of energy and exhaustion and we are struggling to keep track of their activity. To my surprise, I found that they ate McDonald's almost every day.
They said, "Yeah, we eat it because we don't have enough time to cook" – No wonder you have no energy. I get it, as a new entrepreneur, you have limited time, so you need to save money to save time, but don't buy McDonald's.
For breakfast every day I have the same thing, oatmeal yogurt and coffee. For lunch I have more coffee yogurt, veggie sausages and almonds. And then for dinner I have lots of vegetables that I chop and throw in the oven for 30 minutes with some veggie sausages and snacks, of course. And guess what, not only is the food healthier and cheaper than McDonald's, but it's faster for me to prepare it than going through a drive-thru to get a Big Mac.
In the beginning your business depends on you and in the future you will accumulate passive income and be able to take breaks with fewer consequences, but in the beginning you can't just cool off and be sick, eat well and do Exercise - Don't Cut Corners With Your Health.
