The 3 Biggest Mistakes New Entrepreneurs Make
The 3 Biggest Mistakes New Entrepreneurs Make
These mistakes are costly, but more importantly, they are avoidable.
When I got sober, I learned a few really important lessons.
One of the lessons was about working with other people. Part of staying sober is helping other people (mostly young men) get and stay sober. The idea is that you learn as much from them as they learn from you.
I’ve been living through the same experience with my coaching. My students are teaching me so much.
Over the last few months of talking with my students, I’ve derived a few common mistakes that new entrepreneurs make. In today’s issue, I will go through these mistakes and also show you how to avoid them.
LFG. 🔥
Mistake #1 - Giving Away Free Work
I am going to contradict myself, but I actually believe working for free is a very important aspect when first starting a business. But, there is a very specific way to do it and applying this strategy in the wrong way will cost you a lot of opportunity.
What not to do
Don’t give away the work that you want to charge for. For instance, if you’re starting an SEO agency, then don’t do SEO work for free. If you’re starting a wedding photography business, then don’t do free photography jobs for weddings.
What you should do
Give away helpful work that will get your customer right to the point of hiring you or buying your product. For instance, at Stodzy, I give away free marketing audits. The audits are within themselves very valuable and time consuming.
But, the audit gets the customer right up to the point where they need to take action.
If you’re creating a membership site, give free access to the “introduction” channel. This way the new free members can still mingle and get to know the other members, but they don’t get access to any course materials or high level information inside the membership.
Mistake # 2 - You Don’t Charge Enough
I watched a video from Chris Ducker almost ten years ago (oh no I’m getting old) that really helped me with pricing. I wish I could find the video to show you.
Chris’ advice on pricing is simple. He says “double it.”
When you’re thinking about how much you should charge, take the first number that pops into your mind and then double it.
Yes, that’s right. As in multiply it by two.
Pricing your services and products too low is a devastating mistake for small business owners, because the effects from it aren’t felt in a catastrophic blow, but rather are felt through the grinding and slow death of a business that doesn’t make enough profits to service.
If you close half the amount of deals, but charge twice as much, then you will increase your profit margins. You’ll create more revenue but your fixed costs won’t move. Most likely, your fixed costs will decrease because there is less overhead needed to serve less accounts.
It’s hard, because the anxiety of not closing deals can make you act impulsively. But, your future self will be making more money and will be working less.
Mistake #3 - Avoiding Sales
This mistake is the one that will kill your business. You will be dead on arrival.
Most people are terrified of sales, and for good reason. Rejection is terrifying. As humans, we are quite literally wired to avoid rejection. But if you want to build a business, you need to conquer this fear.
What most people do is they engage in the endless cycle of “marketing.”
You post another picture on Instagram. You stalk other people online and try to get inspiration from them. Worst of all, most of you will come up with a new great idea and then start it, but then stop at the finish line before you have to start selling and promoting.
It’s crazy to me how much time people spend on social media when in almost every case, a pocket full of business cards and a membership at the local chamber of commerce will create 10X the amount of business than doing “social media marketing.”
My favorite example of this is the pierogi man.
When Jules and I lived in Nashville, we would go to a farmers market every Saturday. We would always leave with fresh eggs and a few bags of perogies.
The pierogi man made the best freaking perogies ever. And every week he was completely sold out. He would show up with coolers and coolers filled with pierogis and he sold out every week simply by setting up shop at the farmers market.
This guy was the best. He always had such a warm smile and his passion for making pierogis was evident and clear.
This guy doesn’t give a shit about Instagram or becoming an influencer. My guess is that from the farmers market and his store locations, he does more than a million dollars a year.
Pierogi man is out there, he’s selling pierogis, he’s making money and providing for his beautiful family.
Your business won’t succeed if you don’t actively promote your product or your service. Stop wasting time on new projects, visions boards, new ideas, or taking selfies on Instagram.
Take your main offer and get after it. Once you clear $200k a year, then you can start to expand.
Love you guys. Talk to you tomorrow.
Tim
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Yes. Thanks Tim again. As far as sales are concerned, t think this is the reasons why some products are refused to reduce the price on some retail ship windows being displaced.