Eight Mistakes to Avoid in Setting Up a Business

[typography font=”Myriad Pro” size=”24″ size_format=”px” color=”#233ca3″]Eight Mistakes You Never Want to Make[/typography]

It is a well-known fact that out of the millions of Online business start-ups per year, the vast majority fizzle out, stall, get totally derailed or simply fail.

It is probably fair to assume that you believe your business will not be among that number. The question is – how can you avoid it?

You may think you are smarter, have more business experience, and are more dedicated than those who have fallen into the failure pit. Unfortunately, the reality is that unless you avoid the most common pitfalls, you may end up being nothing more than one of the fallen.

There are eight mistakes to avoid that are most likely to trip up new Online entrepreneurs. Let’s go through them together:

  1. Not performing adequate research into the business idea and into the potential market.
  2. Not identifying your target customer specifically enough[1] – narrowing your focus.
  3. Not developing a clear business plan – even a rough outline that can be expanded is far better than no business plan
  4. Not understanding the sacrosanct basics for your business model such as local laws that must be followed, paperwork to be done, fees to be paid, and restrictions.
  5. Allowing yourself to be distracted by facts not in the current “need to know” category – or by enticing offers for unrelated business systems, tools, training, resources, eBooks and courses. 

    Man in boat
    Image by Сергей Тряпицын
  6. Not setting a budget – complete with a “Start Up” amount and a plan for monthly spending.
  7. Not sticking to your budget – overspending can be the fatal flaw of  those who get hooked by the enticing offers mentioned in Mistake # 5
  8. Not using a calendar scheduling your time wisely to ensure the highest level of productivity. Sorry, all those who like to fly by the seat of their pants – that does not work when trying to build a successful Online business.

Your only alternative is to hire a Project Manager and ask him/her to maintain a calendar and send you “reminders”… or use an online project management system and storage site such as Basecamp to automatically send you reminders about your deadlines. (Basecamp has a 60-day free trial that allows you to apply it to your business in order to see if it is a good choice for your business.)

Of all these hazards, Mistake # 5 is the most dangerous and where newbies get caught.  It is where 99% of all would-be Online marketers get derailed. This was one of my biggest problems early on – costing me thousands of dollars and a great deal of time that could have been spent more wisely.

Here’s how it usually goes…

In the beginning your goal seems very straight forward.  As you research your ideal business, you come across an offer that promises to propel you up the ladder ten times faster, offers you a shortcut, or promises that with their system in place, “You Too Will Be Making Six Figures a Year.”

You buy the first “short report,” thinking it is exactly the answer you have been looking for and believe that it will help you on your journey – but, when you read the report, you realize that you now have to learn about six new subjects you did not know existed when you first started out. You feel overwhelmed and worried and scramble to learn “everything” that you need to know – using valuable time and spending even more money.

You buy an eBook on one of the subjects, and sign up for a free email course on another.  Each one of those makes you aware of two more subjects you “absolutely need to know,” so you purchase those…

What happens within a very short order is that you have hundreds of eBooks, Reports and “systems” sitting on your computer. In fact, you don’t even remember most of them – they were filed and forgotten – money spent, money lost. Time passes and suddenly you are a year into the research, not closer to your goal, and feel like a boat without a rudder swirling around in the ocean – going wherever the current takes you. It is a nauseating and disturbing experience.

Fortunately, there are several things you can do to resolve the situation and stop it from continuing.

  1. Check out how much you have actually spent over the past year or months that you have been in business – for information or training of any kind “to help you with your business.”  Go through the Cost-tracking Exercise.
  2. Stick to your business plan – do not allow yourself to be pulled off-track again.  If a product, topic, or method does not appear on your business plan and does not move you closer to realizing your long-term goal(s).  Do not buy it – no matter how appealing it may be.
  3. Finish reading or working with one eBook or one “system” completely before tackling another. Give it time to work. There is no magic bullet, or one-perfect system that will create millions for you.
  4. Find a mentor, teacher, or marketer to whom you relate on most levels, who is highly recommended, and that you trust (to the degree possible in this environment). Stick with that person (or system), and only buy that person’s products. Go through their complete funnel before trying something else from some other source.

None of these tips is cast in stone or can ensure success, obviously; but, if applied diligently – giving them time to work, they will help. You may find halfway through a sales funnel that it really does not contribute to your goals or is too far above your skill level to be useful. If so, cut your losses and find a funnel that is more suited to your needs and current skill level; but, be careful not to jump ship too quickly. Be patient, allow enough time for your efforts to pay off. Then evaluate and make an informed decision about whether to stay on the current path, or find something else that may serve you better.

Use these tips as a guideline – not a rigid set of commandments.

[typography font=”Myriad Pro” size=”20″ size_format=”px” color=”#211d99″]Your Business Finances[/typography]

One more mistake that individual entrepreneurs make, but is not often discussed, is failing to set up a separate business bank account for your business. This is a common mistake of those who are still thinking like an employee rather than a business owner.  It is also the result of not familiarizing yourself with the basics of small business operation.

If you are a U.S. Citizen, you should know that the Internal Revenue Service (IRS) requires a dedicated business account.

So, do not delay – set up the account as quickly as possible – ideally before you start your business. Always inquire about bank fees that may be involved. The bank that handles your personal checking account is a good place to start. When you have an existing account, you may be eligible for lesser fees (or even no fees) when setting up a business account. Credit unions also offer lower rates. It is important to understand the costs involved and to shop around for the best deal.

Remember to “think big,” and don’t put off this step. Get into the habit of keeping good financial records – save receipts, track costs and income on a weekly basis; and, as soon as it makes sense to do so, hire a bookkeeper!

Join us for the next installment – Defining Your Business.

Want all of the information? Begin at the beginning: Building an Online Business.

[typography font=”Cantarell” size=”12″ size_format=”px”]Copyright © 2014 Blurtigo Holdings, LLC All Rights Reserved.
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[1] E.G.: Targeting “women over 30” rather than “single career women with children who run home businesses. No post-secondary education to basic community college courses.  Age 20-34, 82% with pets, 70% with old vehicles and occasional transportation issues.”

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