by Kendra Martin
There are likely a million different lists on how to be successful in starting a business. Most of them in my experience are either too long or they are outdated. I am a millennial female entrepreneur – I don’t have the patience for lengthy documents and I think that most of what worked for a company that was created twenty years ago is antiquated (sorry, but it’s true). The biggest mistakes I made in starting my own company this year were not any of the things I could have read on one of those lists. In fact, they were random but specific, timebound yet timeless (at least for this generation of entrepreneurs). They were big mistakes that cost me a lot of time and money to correct.
So here it is, for all you nuevo go-getters out there, a short and not-so-sweet list of my six biggest mistakes. Please don’t make them.
- Solve a real problem – Lots of people have lots of great ideas. A new technology, a contraption that saves you time cleaning your house, etc. One of the fundamental check-the-boxes you need to do before you invest in your great idea is to make sure you are solving a real problem that NEEDS to be solved. Ensure the problem that needs solving is intuitive, so that when people hear about your great idea they will intuitively agree that they need help solving that problem, because it is in fact a problem for them.
- Don’t take “the bro deal” – As you share with people that you’re an entrepreneur and tell them about your business, people will want to help. They will offer you discounted pricing, AKA “the bro deal”, which will be extremely tempting when you’re bootstrapping your way into launching your company. Every dollar counts, and a bro deal from someone you know will sound like a great idea. P.S.A: Select your help with extreme caution before committing to a vendor. More often than not, if a product or service is more expensive it’s because the quality is better, and in most cases that is worth the extra cost. Don’t penny pinch and cut quality corners, because it could come back to bite you in the butt. I made the mistake of hiring a photographer that I knew through mutual friends, and it was a disaster. I was quoted one price from my friend, then a different price from the photographer, then an even higher price from the photographer at the last minute before the photoshoot. I agree to pay, begrudgingly, and was thoroughly disappointed with his work from start to finish. The truth of the matter was that I didn’t really know this guy, I just trusted my friend when she said “he’s an amazing photographer”, and I paid the price.
- Pay attention to compliance – This part is not fun, in fact it’s an excruciating part of the job, but it is essential to your success. When I say compliance, I am referring to laws, which could be anything from collecting the proper amount of sales tax all the way to annual greenhouse gas emissions. The last thing you want is for your production to be interrupted or a huge unplanned expenditure due to an oversight in the realm of compliance. Get it right the first time.
- Do your research BEFORE you choose a website platform provider – I’m embarrassed to admit this, but I totally screwed the pooch on picking SquareSpace. I spent weeks developing my e-commerce website on SquareSpace and then just as I was about to launch my business, I realized that SquareSpace has a major flaw if you are selling products. It doesn’t auto calculate the local tax rates for the state(s) where you are required to collect sales tax. For me that was California, which meant that in order to collect sales tax properly, I would have had to enter over 2500 lines of unique sales tax rates for all the zip codes in California. This was so demoralizing to discover just as I was getting ready to launch my website. I am currently in the process of switching over to Shopify, and basically had to start from scratch and build an entire new website.
- Lessen your assumptions to the lowest common denominator – this is going to sound harsh, and maybe it is harsh, but don’t assume ANYTHING about your customers. For example, if you are providing instructions for a product, do not assume they are going to understand what you provide. Reality Check: We live in the generation of A.D.D. and most people are distracted by at least ten other things at the same time as they are reading your instructions. Keep all written text extremely straightforward and simple. Think of everything you write as if you were writing the “[insert product here] For Dummies”. There is nothing more frustrating for a customer than to attempt to read your instructions and not be able to understand them. It will make them feel defeated, and that’s the absolute last thing you want your customers to feel. Use guinea pigs (ideally) but at a minimum use research to validate all assumptions before making decisions you can’t reverse.
- If you have to choose, focus on Profit over Revenue – OK, of course both are important, but it frequently happens that huge companies go out of business because they make the mistake of driving revenue over profit. Think of it this way: if my company makes $1M per year in revenue but it cost me $950K to get that revenue, then is that really a lucrative business? The answer is probably not, because the chances are that $50K of profit is already spoken for, in the form of expansion cost (e.g. buying new equipment, investing in R&D, etc.). Focus on building out impressive margins from the get-go. This will be HUGE for you in the following years of your business, because typically through economies of scale and efficiency your productivity and margins will expand as you grow. If you bake in a solid margin from the beginning, then all that additional margin is icing on the cake that makes your company very attractive to investors and gives you the ability to pay yourself.
Kendra Martin is the CEO & Founder of Craft Lab Co., a company that offers Creative Wellness Experiences designed to stimulate the five human senses of see, touch, taste, smell, and hear. Her Candle Making Experience has received rave reviews from customers, and right now if you order 3 kits you get the 4th free! It’s the perfect gift for the Holidays.