When running a business, you’re bound to make mistakes. You can’t build an empire if you’re always in the comfort zone. You have to make bold decisions and even enter unchartered territories to get ahead. But sometimes, one great big idea that you think would turn a fortune could cost you the entire business.
If you want to be smart about taking risks in your business, learn from other entrepreneurs’ mistakes. Here are some notorious business blunders that was once masked as “one great big idea for the company.”
1. Expanding too quickly
Rapid growth is the dream of many entrepreneurs, but there is such a thing as expanding too quickly. Hiring new people, purchasing more resources, and offering new sets of products mean you have more things to manage — and you may soon realize that you had bitten off more than you can chew.
Even if there’s a bigger customer base available, be careful about expanding too quickly. Take all the next steps gradually. For example, if you’re running a web design company and want to offer SEO services to your clients, consider outsourcing white label SEO programs instead of hiring a new team.
With outsourced services or products, you can test the waters. If it turns out your new product/service doesn’t sell well, then you can stop the outsourcing contract and avoid unnecessary overhead costs.
2. Targeting wrong demographics when expanding
When small companies begin to expand, they often look at new demographics to target. For instance, a company launched a new product that it thought would serve as a good companion piece to its flagship product. But the new product targets a different gender, age group, or socioeconomic status. The company hastily assumed the new demographics would be interested in its brand the same way their original market was.
There are demographic trends that are likely to shape the future of retail. But don’t jump on any trend yet; reliable, unbiased market research is necessary to ensure smart demographic shift decisions in business.
3. Focusing on the wrong metrics rather than the right customers
Whether you’re starting or growing a business, looking at the right customers and metrics is imperative. Vanity metrics can make you feel good. However, don’t tell you anything clearly about the current performance of your business — whether you’re attracting the right customers for your brand or not.
Say, your website receives one million views a month. That sounds great, but that could mean many things that don’t necessarily translate to an increase in leads or sales. You may be attracting many users, but if they aren’t your target market, your website content won’t likely satisfy them. They would view your website for a few seconds, but they’d quickly bounce out to find other sites that can answer their queries.
Be it online or traditional marketing, it’s best to focus on the right customers and useful metrics that can tell you how you’re attracting or engaging that market. You can even outsource SEO service work if that’s solely what your business metric needs.
Otherwise, you’re wasting resources on marketing efforts that don’t help your business reach its goals, leading to financial bleeding that is difficult to stop.
4. Overhyping marketing efforts
Overhyping marketing is similar to when everyone raves about the latest superhero movie, and you go and check it out for yourself, but the movie plays, and it’s nowhere near as great as you expect it to be. You feel upset and disappointed. The same happens for customers who were overhyped by your promotions.
In marketing, if you aren’t generating buzz, then you aren’t doing your job. But there’s a fine line between getting your market excited about your new offering and overselling it through larger-than-life promotions.
In today’s digital age, disappointed customers won’t just whine about you to their friends. They have social media and online review sites to express their negative feedback about your brand. Dealing with bad PR is difficult for huge corporations, let alone for a growing company like yours.
5. Focusing on growth only
Again, expansion is the goal of every entrepreneur. But if it’s the only focus, everything can go downhill. You may get obsessed tapping new customer base, using only vanity metrics, and overhyping marketing.
Make sure to focus on what is happening to your business today. Streamline your day-to-day operations, make sure to keep your workers happy to avoid high attrition, and improve customer service constantly.
Working on executing three steps ahead without polishing the present won’t matter if you lose customers due to poor quality service. If you’re keen on expanding, do it gradually. Choose only one area of expansion as an initial step. Striking a balance between growth and quality is the key to expansion.
6. Not taking advice
This may not seem like one big idea to succeed in business, but it is surely a common entrepreneurial mistake. Business owners often have proactive personalities, forging their path all the time. This stubborn independence is one of their strengths but can be one of their most critical weaknesses, too.
It pays to be proactive and safeguard all your great business ideas, but going solo to turn these ideas into reality can lead to failures. Have a mentor instead. This is especially true for areas where you lack knowledge and skills. To improve marketing campaigns, seek the advice of digital marketing experts. If you want to be sure if it’s the right time to get on an investment opportunity, hire business consultants.
Even if you have no idea who to consult, keep networking and reach out to people. With these interactions, you will gain a wealth of knowledge and insight that you can use to improve your business. Building relationships with fellow entrepreneurs and business experts can do wonders for your brand.
In business, you are likely to make tons of mistakes. But if there’s one thing that sets successful entrepreneurs apart, it’s that they can keep themselves from repeating old blunders and learn from others’ mistakes. Mimic those successful business owners and start taking notes of others’ mistakes. By avoiding these fatal business errors, you will be better positioned to achieve lasting success.