Bringing an idea fully to life is nearly impossible if new entrepreneurs dont do their research. Here are some of the most common mistakes that rookie entreneurs make when starting their business.
Many outstanding business ideas are born from a spark of passion; that moment when a daydream stretches the confines of its world to become a true possibility. When a hobbyist, or someone who creates a product out of necessity says, “Hey, I might be able to make a little money with this idea.”
But even the most creative, promising ideas are nearly impossible to fully bring to life. It’s true, we don’t know what we don’t know, but wanna-be entrepreneurs can easily get lost in the excitement and hope of building their dream and they fail (miserably) at doing their homework first.
Here are the most common mistakes that I see newbie entrepreneurs make when taking their “kitchen table idea” to the market. Go ahead, build your dream. But do it the smart way!
1. They Don't Do Real Product Research
Come on, admit it. Your neighbor, friend—or mom—told you that your idea is the best one this side of paradise, right? And why shouldn’t you believe them? Everyone you know has jumped on the bandwagon with praise and encouragement, so they must be right.
I’m going to be blunt. These folks have to tell you all of these good things. They love and care for you and want to support your dream. But they are not necessarily your ideal customer.
You must test your idea. One of the best ways to do that is to take a simpler, less expensive version of your product to market. If you have created a full line of bath products, for instance, don’t wait until all of the branding, production, and packaging is done before you roll it out. Take just ONE of your products to every mini-expo, school fundraising event, and distribution opportunity you can think of. Create a dashboard that reveals trends, sales history, and any other critical information. Most importantly, get feedback from strangers! I know that’s scary, but you have to do it. Offer incentives for feedback on every aspect of your product. Then adjust as necessary.
2. They Aren't Fully Informed
I once coached, albeit briefly, an inventor who had a wonderful product ready to bring to market. Sadly, she invested her nest egg, mortgaged her house, and spent every waking moment for 2 years just to create a prototype, branding, and packaging. And her product idea was a good one. She even had purchase orders from two major retail outlets. But the days of a purchase order providing collateral for a loan are long gone. So here she was with a good invention and the interest of these mega stores, but with absolutely no funding to take her product to market.
Too many entrepreneurs believe that if they can get the interest of a major distributor or retailer that it’s smooth sailing from there. But that’s just the beginning. Do you have any idea what it costs to manufacture and package a product? Do you know the minimums required by most factories? Can you even grasp the reality of the landed cost of your product? Costs of customs duties, tariffs, taxes, insurance, currency conversion, crating costs, and handling fees associated with importing are enormous! These are the things you may run into if your product is promising. Do your homework before you take your first big steps.
3. They Lack Support
So you’ve done your planning, estimated your costs, and gotten product sales rolling. Hurray! Now you have a business, but why? Every entrepreneur I’ve ever spoken to is in business for themselves for one reason: freedom. Now, freedom has many definitions, but it’s at the core of nearly every small business. Yet, these solopreneurs work 60-80 hours a week. What kind of freedom is that? Sure, this may be the reality in the beginning, but it has to change as your company grows.
How do you fill your days? Do you do your own accounting, website management, packaging and shipping, and basic administrative work? If you spend 20 hours a week doing these things imagine the opportunities for growth that you are missing. If you could “buy back” those 20 hours how long would it take you to grow your company to the next level? Most people are shocked at how quickly this could be done if they outsourced the “little stuff” or the things they are not experts at. Find your passion, highest skill level, and key growth strategies. This is where you need to spend your time.
Can’t afford help? Think again. I promise that you are spending--wasting really--more money by trying to be an expert at all things, including the things you absolutely abhor doing. Stop the madness! Save every penny until you can afford one month’s pay for a helper. Then get to work and increase your sales so that you can afford to keep them on.