Here are my tips for entrepreneur pitfalls to avoid. I’ve fallen into almost all these traps, so with these tips, hopefully you can be better prepared.
Working Too Much
You’re focused and determined to succeed in building your business. However, you still need to look after yourself. Working long hours may be a waste of time if you’re so tired that you’re not very productive and your health begins to suffer.
You really do need to take some downtime, go out with your friends, do some exercise, go away for a short break. I find that even when I’m not working, I’m still thinking about work. It’s hard to switch off because there’s always so much to sort out.
Part of the lure of being an entrepreneur is having freedom and control. However, you’re still at the mercy of customers and suppliers. Also, once a hobby becomes a job, it loses a lot of its allure as you wade through tasks that are of little interest to you, e.g. admin.
Don’t fall for claims of “making money online,” many people selling this dream only make money out of you. So check their credentials and reviews before you open your pocketbook.
If you have caring commitments do you have a back up plan, e.g. what will happen if the kids are sick and can’t go to daycare/school? This isn’t being defeatist, it’s being realistic.
You can read more of my thoughts on the advantages and disadvantages of being self employed.
Not Achieving Goals
You need to have specific aims. When I finally gave up my day job to concentrate on being an online publisher, my goal was to replace the earnings from my day job after two years. I resolved that if I didn’t reach that income level, I’d need to find another day job. Bear in mind that if your net salary as an employee is e.g. £25000, your net profit will have to be a lot more than that to cover benefits such as sick pay, employer contributions to your pension and holiday pay.
Some people argue that you have to think big in order to achieve. Personally, I don’t want to run a large business. My aim is to earn enough money working flexibly from home. I don’t want to have employees or have to attend meetings on specific days.
Whatever your goals, the chances are that you won’t achieve them all. So, as long as you know you did your best, don’t be too hard on yourself.
Falling Foul of the Law
Once you have employees you will have to adhere to all sorts of legislation on the minimum wage, holiday pay, health and safety and disciplinary procedures.
One of my blogging friends received a high court writ for allowing a comment on one his blog posts which was claimed to be libelous; he settled out of court to avoid possibly enormous legal expenses.
Even if you have a great product or service, prospective customers need to be able to find you. If your business is web based, then you’ll need to get to grips with Search Engine Optimization (SEO). There’s a lot of hype about being active in social networks such as Facebook and Twitter, but this can end up taking up a lot of time and not delivering in terms of sales.
Sometimes it’s said that women can lack confidence and not be as good at selling themselves as men. Although it may not be in your nature to be boastful about your achievement and abilities, you need to exude belief in yourself for your business to prosper.
Even if your business is doing well, you can still experience cash flow problems, e.g. if you have to pay for stock, but a customer doesn’t pay you by the invoice due date and your bank loan repayment is due. If you take out a larger loan than you need, you’ll be paying interest on that loan – but might that be preferable to your business failing?
Trying to Do Everything Yourself
This is a tricky one because initially you may not be able to afford to hire experts to design your website, do your accounts, etc. It’s unlikely that you’ll be good at all skills required to grow and run a successful business. I was fortunate that one of our sons was a computer science student, as I wouldn’t have gotten started without him. I’ve also had to learn some HTML computer code and do my own accounts.
Not Following Your Instincts
Women are sometimes accused of being too emotional and making decisions with their hearts rather than their minds. While it’s important to seek advice and consider different perspectives, I believe that you need to have a feeling about what’s the right decision for you and your business. I’ve sometimes tried to rationalize too much and ended up making inappropriate decisions when, with the benefit of hindsight, I should have gone with my gut feeling.
About Karen Bryan
Karen Bryan is editor of Help Me To Save, where you'll find tips on how to save more and use your money to get the life you want.