Everybody makes mistakes.
On my small business/startup journey I have learnt a lot more from my mistakes than my victories. We asked some Knokal members (and some superstars of the business scene) to give us some mistakes they see small businesses making and their advice on how to avoid them. Not the most inspiring of topics but I think of it like this — I would rather read a sign that says Wet Paint than find out the hard way. This is part 1 of a pretty large conversation, if you agree, disagree or have a different opinion let us know. The comments section is at the bottom — go nuts. We all get better when people share ideas.
Getting started
“The mistake is focusing on all the ancillary stuff first — branding, business cards, marketing etc. You can so easily get lost in these tasks and get distracted from doing what you do. To avoid it: initially, at least, focus hard just on ‘doing what you do’. Do the work. Gain some customer loyalty. Learn. Sweat a little. After a bit of this, you’ll be in a much better position to do all the ‘fun’ stuff and get yourself known. Later on, the opposite problem often occurs — too much time working in the business and not enough time working on it. But that’s a different tale.”
Ty Bowes, Lightwork IT
“The biggest mistake small businesses make is spending too much time planning their success instead of getting out there in the dirt quickly. Avoid by always testing with your market from day one.”
Jason Cross, The StartUp Hustle
“When you’re just starting out there is a temptation to choose a short term result that speaks to survival of your business vs. working with your clients and seeing their growth in your future. So the challenge then becomes choosing the right clients and letting go of the ones who don’t work for the way you want to do business. Play the long game.”
Mikey Leung, Digital Storytellers
Product Market Fit
“One of the biggest issues we see is the focus on channel before product. It’s very common to launch without speaking to any customers, to determine what they are doing is solving a need and if their product solves it.”
Alex Stewart, Alex Stewart Digital Services
“If you build it, they will come” is probably the worst motto for a small business to rely on! Don’t assume that customers will come flocking to you just because you have a great product or service. Make sure you allocate time and budget for marketing to your target audience, particularly in the digital space.”
Sarah Mateljan, Course Genius
“Not solving a big enough problem is the biggest mistake businesses make. Creating a solution in search of a problem. We don’t need more great ideas. We need more entrepreneurs with the vision to solve a problem so bad it keeps people awake at night”.
Jeremy Liddle, Capital Pitch
The Numbers
“Cash flow. Small businesses need to have a crystal clear view of their cash flow to plan and allocate resources appropriately. Timing of the first two hires is also crucial”.
Chris Were, Rappsio
“Not understanding your numbers, how to avoid it; Take some time to really understand your numbers. Mainly unit economics (profitability). IE how are you going to make money and how much, understanding cash flow is absolutely critical. If an entrepreneur doesn’t understand how they are going to make money then they probably shouldn’t be in business.”
Adrian Bunter, Venture Advisory
“Small businesses can find it hard to identify the cost of their goods. Price and financial risk isn’t always top on their long list of priorities and businesses can sometimes be confronted with unexpected losses. Knowing where your profit margins and break even points are is essential. And if the businesses are importing/exporting, knowing what exchange rate they need to be profitable is vital.”
Kate Grifftiths, FX Corp
Taking advantage of being small
“It is easy to think that the ‘big guys’ in any industry have an advantage over small businesses. However, in today’s fast moving marketplaces, small businesses are better positioned to test and adjust their offerings to new market trends faster than their bigger competitors.”
Luciano Devoto, True Counsellor.
“A mistake I see startups and SMEs make constantly is not recognising and leveraging their assets. Every brand, no matter what size, has something that another brand wants. Whether that’s skills, network, product, a venue, social media exposure or an email list, being very aware of what you can offer in a collaboration or strategic partnership will dramatically increase your opportunities for exposure and growth.”
Jessica Ruhfus, Collabosaurus
Marketing
“After 22 years in Marketing, I’m still surprised how hard business make it for people to give them money in exchange for what they offer. Even the basics of explaining what’s on offer is often done without clarity, losing sales and customers…that actually wanted what you had! ‘Be Clear’ ‘ Make it easy’. ”
Karl Shelton, Touch Marketing
“Some people have content marketing all wrong. If you write just one article, you should spend at least thirty to one hundred hours promoting it. Small businesses often struggle with online marketing because they don’t understand it entirely. In human psychology, when someone tends not to understand something, they avoid it. A lot of SMB’s are not ready for the digital world.”
Luke Fitzpatrick, GHack Labs
“Networking to gain rather than to give and connect. When you learn to switch your focus from “how I could benefit” to asking “what’s in it for them?” and “how I could possibly add value to the other person” things change. This is how I started to build productive relationships.”
Anfernee Chansamooth, Simple Creative Marketing
Getting the right help from other businesses
“Most start-up ventures are conceived by professionals that are very successful within their industry however they have a very specific skill-set meaning they often overlook (due to enthusiasm, a ‘big picture’ mindset, or lack of experience) peripheral tasks and setup requirements that can hinder growth and in some cases have serious implications legally and/or financially in the long term.”
Thomas Richards, Parralel VC
“A sure fire way to leak money during the startup phase of a small business is to not negotiate with vendors and service providers. Most services and product providers are up for negotiating prices. The best way to go about this if you’re not a very strong negotiator, is to do some research into what price point other providers are quoting. This will give you an idea as to what is a good price. When you learn this information, negotiating becomes a lot simpler.”
Andrew Vilbar, SEO Rankup
“A mistake I see is small businesses not doing the research and vetting on outsourced businesses. Finding the right outsourced businesses early can have a massive effect in the long run. For example, the right accountant that can help you automate a lot of your processes and can save you a lot of time, money, and effort — and when you need to speak to a bank or investors, everything is prepared. Doing the work early and thoroughly has such a long term benefit.”
Florian Dahlmann, Share a Camper
Getting Started
“Launch as soon or even before you think you can launch. just go do the bloody thing. If you’re out there all alone, you’re either going to do something really rad, or really stupid, but you won’t know unless you go.”
Miles Glickman, Surf more Hurt less
“The strive for perfection is a mistake I see a lot. We were accepted to exhibit at South by Southwest with a pitch deck. When we released Knokal it was a buggy shell of a product. But we got it in peoples hands and we had our customers telling us what we should improve on and what we should do next. If we waited until the product was perfect we wouldn’t have released it yet. Instead we released early and have over 1000 members — 1000 bits of feedback right in front of us. A good feedback loop is better than a perfect product no one has seen.”
David Smith, Knokal
Lets hear yours — part 2 will be from your comments. And join us at Knokal (www.knokal.com), we are building an online community of Australian small businesses. We want to help small businesses find new customers, find new service providers and give them the right tools to build their businesses the way they want to build them.
