2013-04-09 00:00:00Small BusinessEnglishhttps://quickbooks.intuit.com/uk/resources/uk_qrc/uploads/2017/01/John-MacLeod.jpghttps://quickbooks.intuit.com/uk/resources/small-business/six-mistakes-i-learned-from-during-my-first-two-years-in-business/Six mistakes I learned from during my first two years in business

Six mistakes I learned from during my first two years in business

5 min read

Thinking about writing a blog on my business gave me a real opportunity to consider what people might find most interesting and useful about my experience as a business owner.

It’s a similar process to when I’ve been asked to speak at an event or host a workshop with a group of young aspiring entrepreneurs.  It was in one of these workshops that my favourite discussion occurred and I had the most interaction – it was all based around my biggest mistakes so far, so I thought that would be a great topic to re-create in a blog.

I’d love to hear the mistakes you’ve learned from too!

Mistake 1: My Idea? Sorry it’s top secret (pre-start)

I made a big mistake with my first project – an iPhone application for commuters. I saw it as Intellectual Property (IP) so I didn’t want to discuss this idea with anyone or ask for any feedback/advice.

I understand that with certain products there may be IP issues – I have been through the patent and trademark process with our latest product, Clear Notes. However, there are ways around this, such as using NDAs – most people are happy to sign these to discuss your idea and once you have some level of protection, you can be more open about it.

Even if you think it’s a great idea, others may not and without speaking to your target market, how will you ever know?  Market research is essential before you invest a great deal of time, money and effort into an idea.

Mistake 2:  Hey we’re friends, fancy going into business together? (pre-start)

For my first business idea, as I mentioned above, I didn’t really speak to anyone about it other than my closest family and friends.  It was one of those friends who really liked the idea and we spent more and more time discussing how it could work and the potential for it to develop.  I just took these conversations as friendly support but before I knew it we were formal business partners in the project.

We didn’t discuss how it would be working together or even our defined roles in the business – it just happened.  I certainly don’t believe that you can’t run a successful business with a friend – in fact I’m certain you can and I know of several examples. It’s just a matter of ensuring that everything is discussed and put into place before you begin.

One of my business partners now was merely an acquaintance at university and I identified him as someone who had the skills to help me grow my business. Now we work together very effectively – I believe this is a benefit of not having that close relationship beforehand.

Mistake 3: I’m a start-up, work with me please! (just trading)

When we first started, I was so eager to take on business that when the phone rang we had practically said yes before the conversation even began.  This was a real negative in several ways – firstly, because we would promise clients whatever they wanted, even on occasions when we couldn’t deliver and this is a sure-fire way to kill a client relationship!  Today, if we can’t deliver on a certain deadline or quantity, we will be upfront and truthful. We often reach a compromise and as the client appreciates this honesty, the approach has helped us build several long-term working relationships.

Secondly, they may not have been the right client for us – it’s important to do your due diligence on potential customers so that you know you can meet their needs and also that they can benefit from what you offer.

Mistake 4: Using spreadsheets for financial management (start-up phase)

QuickBooks has revolutionised the way we manage our accounts – after transferring all our existing data quite easily from spreadsheets, we were ready to use QuickBooks right away.

We now have much better visibility of our business than we did with spreadsheets. In particular, I love the snapshot view which offers a quick look at the current state of our business, and also the various reports which can highlight areas for growth, potential issues and sales opportunities.  I would recommend that any entrepreneur starting out uses accounting software to manage their finances.

Mistake 5: At the first sign of hesitancy, drop the price (just trading)

We were looking for as much business as possible in the early days and we almost had the mindset of “this client call will not end without the business being secured”. This isn’t such a bad attitude if handled in the right manner but if a prospective client was concerned or wanted to go away and think the offer over, we would often reduce the price – sometimes even if they hadn’t asked for us to do so!

This not only cheapens the service you offer but can also lead to taking on work which can be vastly time-consuming for little, if any, profit – this will only lead to resentment and usually a poor service too.

So we flipped this around and looked at what we offer – we know we’re the best at what we do so there shouldn’t be a need to reduce our costs after we’ve calculated what we’re worth.  We now look to upsell our services and promote the added value we can bring to a company. This has led to a client list we love working with, a happier workforce and a brighter balance sheet!

Mistake 6: I’m new to business, I must network excessively (start-up phase)

Even before I started my first business, I was aware that networking was an excellent way to meet influential business people, pick up some great advice and enhance your contact list.  As I’d heard so much about how important networking was, it was high on my agenda so I searched out each and every event coming up.  Some of them weren’t even related to my industry, sector or location but I attended regardless. It got to the point where I looked at myself and wondered, am I a professional networker or a business owner?

Networking is useful but running the business had to be my priority at this stage.  Now I make sure I only attend highly relevant events. I research the speakers/delegates beforehand, have lots of two-way conversations and ensure I follow up with any new contacts soon after the event.
These are some of the key mistakes I’ve made during my first two years of business – there are many others and I’m sure there will be many more to come.  However, the most important thing for me is that we have learned from these mistakes and improved our businesses systems and processes as a direct result of them. 

I hope you have taken something helpful from my blog and thanks for reading. I’d love to read your comments and experiences too.

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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