Posted by With everyone, their neighbor and their neighbor’s dog throwing up a Shopify store lately you might be surprised at how few actually turn into real, profitable businesses. There are a multitude of reasons why. Far too many to list out here. But at my company, these five are the ones we’ve named “business killers.”
1. You don’t have a 10x unique value proposition or you do but nobody knows about it
Can you answer yes to these questions: Is your product actually better than the competition? So much better that customers see you as the only logical choice? Do customers know this or do you have to tell them? Is your value proposition repeated consistently throughout your website, social media, emails, PR, etc?
You must first have a unique product or brand value, and then, second, make sure people know this about you without having to think twice.
Related: What is Your Value Proposition?
2. You don’t take the time to craft a marketing plan
This comes down to strategy vs tactics. Imagine you’re on a football team. Strategy is your game plan. The “plays” are your tactics. “Plays” would never work if they were random, so why would you operate your business like that? In marketing lingo, tactics would be promotions, PR, email marketing, etc. But those only work if part of an overall cohesive marketing plan. Operating strategically allows you to know the timeline needed to gauge success, and when to start your next marketing initiative.
3. Poor management of cash flow and ROI
In the beginning of a brand’s lifespan (unless you have massive funding) most of your spending is going to be going to direct marketing (think Dollar Shave Club or Warby Parker early on) and customer acquisition vs mass market branding (think CocaCola). Meaning, you have to ruthlessly optimize your marketing for whatever is driving the greatest return.
Related: 3 Cash-Management Strategies for Improving Cash Flow Issues and Optimizing Efficiency
Key Clarification: This doesn’t mean that you should turn into a spammy sales machine. It just means that each marketing piece you put out should drive some sort of action. Downloading a PDF, subscribing, buying now, etc. You want to maintain brand equity and focus on building your following.
4. Being penny wise and dollar foolish
This one is pretty simple. Don’t buy the cheapest thing out there on all fronts. When you go cheap you lose key functionality, customer support, quality of the service to customers is subpar and it will seriously hurt your brands long term value. In the beginning, shoot for middle tiers of SAAS products and other operating expenses.
On a side note, if it’s not in the budget don’t buy something way out of your budget if it’s going to hurt cashflow or put your business in a situation where you can only cover two more months of expenses and you’re praying that this new fancy tool will be able to cover it. 9/10 times it won’t. Don’t be dumb.Wait until you have 4 months of cash reserves at least.
5. Ignoring what the market says
A lot of what you do the first year is iterating as fast as humanly possible on everything from value proposition, website design, marketing plan, who your target audience really is, etc.
But if the business is flatlining and you’re not willing to look at the data because you have this idyllic vision of what your brand is “supposed” to look like, and you just double down and pump more money into ads that won’t work…you’re just speeding up your journey to the graveyard.
Remember, the market always tells you the truth about what works and what doesn’t. Don’t ignore the data. Sacrifice your ego for the sake of your business and its employees.
How to implement
One by one. Sit down with your team, or just yourself if it’s a solo operation. Break each one down and then pick which one will have the greatest benefit for your business first. Starting with number one and two on this list are a great one-two punch to start with.
Summary
The first year in business can be scary, stressful and make you want to question why you’re even doing this. And while this list isn’t comprehensive, it should help you avoid the most common mistakes people make when getting started selling online.
If you want to learn some other tools or you just want to hear what an expert would do then make sure to look for an expert who has gone through the gauntlet and actually done what they’re claiming they can do for you.
Related: A Marketing Agency Model That Actually Benefits the Client