By admin |
We often think we know what a business is and does — something that makes money by selling products or services. Many people start a business around something that they love, something that they are passionate about, or their skills and knowledge. They work hard to try and acquire customers but end up with frustration, not making as much money as they would like to.
Most go out of business in their first year, and many of the survivors never go past self-employment. Self-employment can be great, but it is different from a business. Most attempts fail in the first year of business because the owners are holding a misconception about what a business is. This “missing” information can allow you to avoid common mistakes that lead to failure and have an easier experience building your business.
Self-employment vs. business
Self-employment is like having a job where you are our own boss. However, many self-employed individuals are terrible bosses for themselves. They make themselves work long hours for low pay, and the idea of having a flexible work schedule where you work less and make more than as an employee quickly disappear. A few people do realize those outcomes and make seven figures on a flexible schedule of their choosing; however, many struggle and just get by.
A business is a system, tool, or mechanism that provides what is needed or wanted inside of a group or community. In other words, a business gives the market what it wants and needs to solve their problems, challenges, and frustrations and fulfill their desires. The major differences between self-employment and a business are that:
- A business is scalable and can grow as large or as small as the owner is willing to build it. The potential growth over time is almost unlimited.
- A business becomes its own entity, separate from the owner, taking on a life of its own.
- A business forms its own community of people inside it and develops its own culture.
- A business can accomplish much more than an individual and is not limited by the owner’s time, skills, or lifespan. It can produce more with more people and live beyond the lifespans of anyone who works for it.
- A business can be used to accomplish a vision or personal mission of an owner who wants to make an impact in a community or the world.
This is much more than an individual trying to sell and deliver enough products or services to make a living or have a particular lifestyle. Many people who start a business start in self-employment with the desire to grow it into a business. The common mistakes that people make in business are:
- Basing their business on what they love to do, are passionate about, or their skills without considering what the market needs and wants.
- Basing their business on guesses and assumptions that the market behaves and thinks like them, instead of actually finding out how the market behaves and what it thinks.
- Spending lots of time, energy, and money on trying to convince the market to buy products and services that it does not want or need.
- Not creating specific goals and planning the actions required to achieve them. For more on this, please read our article on planning. Without specific goals, your business has no firm direction or destination. Without a plan of action, your business is not likely to reach its goals, since it is not known whether the quality and quantity of actions being taken is sufficient. Your business is left to chance, hopes, assumptions, and wishes rather than being based in reality. The uncertainty results in a lack of clarity around your business.
Common business mistakes
A business that lives inside a bubble will not prosper. Customers want to buy what they want, not what we think that they want. It becomes important to find out what the market needs and wants so that products and services can be designed to be exactly what the market will buy.
To avoid these four common mistakes, or if you find your business making one of these mistakes, you can look at the following suggestions:
- You do not have to let go of what you love to do or what you are good at. Your business can look for a market that wants and needs your existing products or services. Your business can also find out what the existing market wants and needs so that the products and services can be modified or changed to cater to the market.
- Instead of guesses and assumptions, do the required research so that your business knows what the market thinks, how it behaves, and what it wants. This can be done through market research from other organizations and associations or by speaking to your target market. There are different ways to engage your market, from speaking to them to surveys to social media to focus groups.
- Marketing and sales become easier when the products and services are what people want. People do not require convincing when they already want or need something. Your business needs to communicate effectively so that your target market understands that your products or services meet their needs.
- Creating specific goals with deadlines creates clarity for where your business is going. This provides some certainty for everyone inside the company. It guides the actions to be taken. Create a plan of action that allows you to see how your business will get from A to B. Once the actions are scheduled, it becomes about tracking the actions taken and the results produced. This allows your business to know whether it is on track, ahead, or behind on reaching specific goals. Your business can now take corrective action if required, and it has a better chance of reaching its goals. The benefit of planning is clarity and a chance, not a guarantee, of achieving goals.
The bedrock of a business
If you are interested in owning a true business, you need to lay the foundation by:
- Discovering what the market needs and wants in reality through research or speaking to your market.
- Discovering what the market is willing to pay and can afford.
- Developing or modifying products and services to meet the needs and wants of the market.
- Communicating effectively with your market so that it understands that the products or services meet its needs and wants.
- Creating the kind of culture and community you want inside your business.
- Creating specific goals and milestones with dates.
- Creating an action plan to reach those specific goals and milestones by the specified dates.
- Building it so that it is scalable or can become scalable.
Beyond the basic foundation for a true business, there are further actions for taking your business to the next level. That work can wait until the business is ready to go beyond surviving, beyond prospering. That is when the owner can use business as a tool or mechanism to fulfill his or her personal vision and mission in life.
If you need guidance on avoiding these common mistakes and problems, or are looking to grow beyond self-employment, please contact us for a free assessment. You can also learn more about our products and services. We look forward to hearing from you.
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