We Asked Our Readers About Their Biggest Mistakes When Doing Business. Here's What We Learned
As part of our blog readership survey (February 2018), we asked the participants about their wins and struggles. One question was:
What is your biggest mistake in doing business?
The response we received was so enthusiastic and insightful that it was worth a separate
1. Not Taking Enough Action
Not taking enough action is a common complaint, especially for
Here’s what you can do about it:
- Focus on the why of your business to motivate yourself to take action.
- Develop robust plans and commit to them instead of taking decisions on the fly.
- Accept that you will make mistakes and that things don’t have to be perfect.
- Surround yourself with a helpful community of fellow entrepreneurs.
A productive environment can help as well. If you’re working from home, read this article to create the perfect home office.
Also read: Productivity Hacks for Small Businesses
2. Not Being Able to Promote Your Products
Entrepreneurs who don’t come from a marketing background often struggle to put themselves out there.
If you don’t know whether a marketing tactic will work, you’ll be jumping from one marketing tactic to another. When you’re desperate for growth, any tactic that promises faster results can look more attractive.
The solution is to adopt a more measured approach to marketing. Start by:
- Adopting a proven marketing plan and committing to it
- Arming yourself with better marketing knowledge
- Outsourcing marketing activities you’re not comfortable or experienced with.
3. Not Defining the Market Early Enough
As any seasoned entrepreneur will tell you, the
Worse, you’ll lose marketing dollars (and time) pitching it to the wrong audience.
To define your target market, you need two things:
- A deep understanding of your product and the problems it solves.
- A deep understanding of your customers and the problems they face.
Start by studying your product
4. Not Starting Sooner
There is an old Chinese proverb: The best time to plant a tree was 20 years ago. The second best time is now.
Lots of businesses feel they should have started earlier. Some didn’t start because they didn’t have the time or money. Others hesitated because they didn’t have the expertise or the right tools.
If you’re still on the fence, know that you will eventually regret not starting sooner.
The good news is that starting an online business is easier and cheaper than ever. Refer to this guide to learn how to create an
5. Not Buying Enough Stock
Inventory management is a critical but overlooked aspect of
To estimate inventory, calculate the
- Total organic traffic you can drive to the store
- Total paid traffic you can buy with your budget
- Estimated spikes in sales due to referrals (such as being featured in a website)
- Conversion rates for stores in your niche, broken down by traffic source.
For example, stores in your niche might have 1% conversion rate for organic traffic. You estimate that your store can get 50,000 organic visitors/month. At a 2% conversion rate
Refer to this article on Maker’s Row to learn more about inventory management.
SmartInsights has a breakup of conversion rates by industry and audience.
Read this article to ensure inventory accuracy in Ecwid.
6. Not Being Visual Enough
Online retail is all about visuals. Since customers can’t see and feel the product, they rely on
Making your store more visual involves several things:
- Taking great product pictures
- Developing a visual theme
- Giving customers a better idea of the product with
Refer to our guide on visual merchandising to improve your store’s visuals.
7. Not Outsourcing Activities
The problem is even more acute with outsourcing since you can’t actually see the worker.
Solve this business mistake by:
- Outsourcing only
non-criticalwork at first
- Developing a robust communication plan to evaluate and instruct workers
- Gradually scaling up outsourcing operations to more complex tasks.
Outsourcing doesn’t always work and you will run into some bad apples. The key is to push through initial failures until you find people you enjoy working with.
8. Not Approaching Big Investors
While there is certainly a virtue to be made out of bootstrapped success, good investors can unlock a lot of value. Approaching them, however, can be intimidating.
What if they don’t like your idea? Do you even have the metrics to get them interested?
The first thing to understand is that big investors want one thing above anything else: a positive ROI.
You don’t have to be from MIT or Harvard Business School to attract investment. If you have an idea, growth, and a path to profits, investors will listen.
Next, follow the advice in this article to create your business plan. Gather your metrics, team, and any credentials that will make you more attractive. Good bookkeeping practices can help here. Condense your idea, metrics, and market into a short pitch. Use Founders Institute’s madlibs approach to write it.
Make sure you approach investors when you’re on the top of your game (in sales). This can help you land a better deal.
9. Hiding Out of Stock Items
Sometimes, you want to sell a product but don’t have it in stock yet. Maybe its stuck in manufacturing. Or maybe you’re not ready to launch them in the market yet.
Removing these products altogether from the store means two things:
- You won’t build any presence in search engines for them
- You won’t have any way to estimate customer demand.
If you have a lot of such pages, your store will also look empty. Instead of hiding those products, simply remove the Add to Cart button from the product page. This way, your store will act as a product catalog. That will allow you to run promotions and gather customer data without actually putting the product for sale online.
Refer to this article to turn your store into a product catalog.
Read this to create a more flexible product catalog.
10. Not Investing in Customer Service
When you’re starting out, a single angry customer can ruin your business. If this customer is motivated enough, he can easily muster an online mob and leave your reputation in tatters.
There is no easy antidote to angry customers. You have to play the
At the very least, make sure that you address common customer problems:
- Keep customers in the loop about delays, quality issues, etc.
- Practice transparency in pricing, shipping, returns, and manufacturing.
- Adopt an honest, personal tone in all your communications.
Most customers will give young businesses a long rope. But if the product quality and customer service quality are both bad, they’ll turn on you quickly. At the very least, you should be honest and upfront about your issues. Don’t pretend to be bigger than you actually are. And don’t promise results you can’t deliver.
Read this article to learn how to deliver delightful customer experiences.
11. Not Making Detailed Plans
They say that failure to plan is to plan to fail.
Nowhere does this apply to more than
A detailed plan might seem like a waste of time when you’re starting out. Once you actually start, however, it will save you countless hours and bad decisions.
Besides a business plan, you should also have a detailed marketing plan. This should include SEO, social media, and paid channels.
Read this article to learn how to design a social media marketing strategy.
Read this article if you want to start selling globally.
12. Not Buying All Domains Associated With the Business Name
If you have the .com version of your name, you’re good to go, right?
Competitors and domain squatters can easily buy the .net, .org, and
You can try to sue them, but it will take way too much time and money that you could spend elsewhere. Keep yourself safe by buying all important versions of your domain name. At the very least, you should have the .com, .net, and .org. If you operate in a country other than the US, also buy your local
13. Not Investing in SEO
SEO is one of the best sources of
SEO should be a factor in every decision you make, especially the following:
- Your product catalog must be logical and SEO friendly.
- Your store design should be content focused and load fast.
- Your product descriptions, content pages, blog posts, etc. must be keyword rich.
Investing in SEO will give you incremental returns over the life of your store. As you build backlinks and gain authority, you will drive more and more traffic from search.
14. Not Using
High-Quality Raw Materials
It doesn’t matter what you sell — clothes, shoes, furniture, food — the quality of your products is crucial. To get quality products, you need quality raw materials.
Start by deciding whether you want to make, manufacture, or wholesale your products. If you choose the manufacture route, use this guide to find a manufacturing partner. If you decide to make your own product, you’ll need to contact suppliers. Read this guide to understand the science of contacting suppliers.
The quality of your end product will depend on the quality of the ingredients that go into it. Make sure to try out several suppliers before deciding on one.
15. Not Watching Your Finances
It’s easy to lose track of boring details such as bookkeeping when you’re first starting a business. The thrill of building, promoting, and selling your own products often makes people forget that there is a business side to things.
Make strong bookkeeping a priority for your business right from day one. Use accounting apps to keep track of every penny flowing in and out of the business. Set aside a fixed budget for all expenses. Make sure that it aligns with the estimated expenditure in your business plan.
Until you can hire an accountant, it’s also a good idea to learn small business accounting basics.
16. Not Setting Aside Enough Money for Marketing
A common business mistake is spending so much money on developing the product that you have none left for marketing it.
This often happens with
If you’ve ever encountered this situation, ask these questions:
- What features does my product have? Which of these are must have, good to have, and nice to have?
- How much does each feature cost to implement? Can you remove some good to have and nice to have features to cut costs?
- What materials does the product use? Can you substitute some materials without compromising the quality substantially?
- Can you find another supplier or manufacturer at a lower price?
- Can you save time and money on shipping?
Your goal should be to get the most viable version of the product without overshooting the budget.
If possible, try raising additional funds by crowdfunding its development. Here’s a short guide on crowdfunding for online sellers.
17. Not Selling Worldwide from the Beginning
The internet allows you to sell to any corner of the world. Yet, many businesses delay international operations, costing them thousands in lost sales.
Selling globally can be intimidating. Customs, shipping, refunds, and payments become much more complicated across borders.
Thankfully, solutions like Ecwid have made this easier than ever. Ecwid integrates with a number of payment gateways, making it easy to accept payments from anywhere. It also works well with several international shipping and fulfillment services. You can even optimize your store for international customers.
For more information, read this article on selling globally.
18. Not Hiring Enough Employees
It’s easy to fall into the trap of saying not yet when it comes to hiring employees. After all, your finances are limited and employees are expensive. You also have to worry about finding, interviewing, onboarding, and training new recruits.
Not having enough workers can take a toll on your time, motivation, and resources. You can get stuck doing mundane tasks (such as order fulfillment) when you could be doing something more transformative (such as developing a new product line).
The solution is obvious: hire people as soon as you need them. A good employee brings much needed energy, insight, skills, and enthusiasm to a growing business. The initial costs might be high, but the returns over time are worth it.
19. Not Balancing Work and Life
As an entrepreneur, you have no fixed hours. Your work doesn’t stop after 6 pm. You’re thinking about your store 24 hours a day, 365 days a year. As a result, many entrepreneurs struggle to find
Such thinking is actually
Set aside time to relax. Not only will it make you happier; it will also make you a better entrepreneur.
Have you ever heard of paralysis by analysis?
Sometimes, you can overthink a decision so much that you’re unable to take any action.
The first thing when dealing with this problem is to forgive yourself. You’re not the only one who
Next, arm yourself with knowledge. The more you understand a problem, the more confident you will be in making decisions. Go through the Ecwid blog and find topics related to your problem. Use this knowledge to stop thinking and start deciding.
Making mistakes is a part and parcel of running a business. The important thing is to analyze your mistakes and learn from them.
Have you recognized yourself in these mistakes? What other mistakes have you made in your business? Let’s chat in the comments below!