All new entrepreneurs are passionate about their business idea and cannot wait to launch their company into the world. We are fired up and start doing all the things that make us excited and keeps us going. Our impulsive behaviour can sometimes cause us to make mistakes. We know that starting a business is difficult so let’s look at some of the mistakes that other business owners have made and lets learn from them. This will help us not only save time but money that can be used to create a more successful fashion business.
- NOT UNDERSTANDING HOW TO PRICE YOUR PRODUCT
We often say that if you not making money, you have a hobby. Many new entrepreneurs choose the penetration pricing strategy which is setting the price lower than competitors to attract more buyers. Using this logic, your buyers could possibly find it cheaper somewhere else.
We are so afraid to charge for our product because we are afraid to lose the sale, so we end up discounting our products by 50% even before we launch. We want to be able to set a price that covers all the costs that you have incurred to bring that product to market, making a loss is very demotivating for a business owner.
SOLUTION: Understand what your competitors are charging and see if this makes sense for your brand. We want to be able to set a price that covers all the costs that you have incurred to bring that product to market, making a loss is very demotivating for a business owner and will eventually cause your business to fail. Make sure that customers understand the value of your product to justify the price that they should pay for them.
- NOT UNDERSTANDING WHAT DRIVES YOU
We have often said that entrepreneurship is a roller coaster ride. We have very high highs when we close that deal but often they will be times where we have to face the lows and we need to stay motivated. We need to understand what keeps us motivated. Many entrepreneurs start a business that they love but not necessarily good at and this doesn’t pose a very good ending for that business.
SOLUTION: A widely used concept called Ikigai: “A reason for being” It is used to find your life’s purpose. It is however not a quick solution for economic success. Rather it is a long term tool in order to help you focus and to keep you motivated. Use the Ikigai template to guide you on: what you love, what the world needs, what you can be paid for and what you are good at.
- NOT KNOWING YOUR CUSTOMER SEGMENT
It is very difficult to say no to somebody who wants to pay you for something. We end up saying yes to everyone that approaches us and we either lose our brand identity, brand aesthetic or forgot who we wanted to target in the first place. We have an idea or concept of what type of product that we want to sell. Now we have to understand whether anyone will pay us for it.
SOLUTION: Create a buyer persona by understanding your customer segment in more detail. This will help you to noy only create a product that you love but a product that they love and most importantly will pay you for. As entrepreneurs, we often struggle with the ugly F word, FOCUS! The more you focus, the more specific your customer is, the more success you can achieve. Go on, create those 1000 true raving fans!
- FAILING TO INVEST IN MARKETING AND BRAND AWARENESS
There are so many new brands that are launching almost daily. The one thing we do know is that we need to cut through the noise. As a small business, we are scared to spend money on marketing. Online marketing can seem overwhelming but it is ok to start small and to master one platform at a time, starting with the digital platform that your target customer is using. Marketing takes a long time to bring in results.
SOLUTION: You need to find the customers that identify with your brand and your story. Create a website or an online home base to build credibility and to channel your marketing efforts. Come up with a detailed marketing strategy for your business to find your first customer, your first 10 customers or your first 100 customers.
- IGNORING THE NUMBERS
Almost all new entrepreneurs that I have chatted to did not have a handle on their numbers. They didn’t understand the true cost of their product. They mixed personal and business finances and some even neglected to open up a business bank account. Besides the tax implications of mixing finances, you don’t have a clear understanding of the financial position of the company.
SOLUTION: Create a bookkeeping system that allows you to understand whether you are making a profit or a loss. Create a sales forecast to help you determine how many products you need to sell in order to build a successful business.
If starting a business is in your future, then these are only some of the things we can do to help us in our journey to success. Starting a business is exciting, growing it to be successful is one of the hardest things to do. We are often excited when businesses made the wrong decision, it is ok to make mistakes but fail fast and change your course of direction. Learn from others as much as you can, have a business mentor to support and guide you.
