Rookie Move #1: Overspending.
In the early days of a risky startup, the last thing we Black female entrepreneurs want to do for an unproven business model, particularly for new entrepreneurs, is shell out a bundle of dough for overhead and startup. Small business is tough. You’ll need to spend every penny wisely in order to stay competitive in today’s market. Yes, you will have to spend, but logic and timing are everything. Wait until your product is validated, your internal operations needs are clear, and you know your client well. Then you can make strategic choices about investments in marketing, operations, human capital and technology. Now, don’t rush to the other extreme on this. You must beware of under-spending or spending money in the wrong places. Also, don’t forget to use these same strategies with time! Time is money, as the old adage says. Budget your time just as wisely and frugally. There is much to do in the startup phase and the countdown to your breakeven point shows no mercy, so deciding where your time goes, as you would your finances, will prove to be a critical decision for future success.
Rookie Move #2: Over-estimating or Assuming Demand.
It’s easy to be excited about your product because your immediate circle or starter clientele love it. But when you think about the number of clients that it will take to get you to 6-7 figures in profit, you have to remember that, in order to make a business and life out of it, you’ll need a lot more people to love your product and buy your product continuously. Ensuring steady revenue requires research and testing outside of your circle and immediate access. Don’t assume. Validate. Pilot your products at fairs, pop-up shops. Conduct focus groups. Pay for market research. Do some bootstrapping hardcore Google research. Do what you need to validate the demand and interest in your product. This validation will also inform important changes and investments that will help you avoid the pitfalls of rookie mistake #1 as outlined above.
Rookie Move #3: Failing to Design.
Don’t jump in and just start selling and build your business on that. Design a business model that is strategic about revenue streams, client strategy, cost structures, and value proposition. You can use the business model canvassing method to think strategically about all of the parts and pieces to your business model. When you decide intentionally how these pieces fit together, they inform your product development, pricing strategy, and marketing investments in a way that will create much quicker and more powerful results for your business. When you are a designer, you also go to the model to make changes when things aren’t working, not just surface tactics. It’s similar to clearing up symptoms when you’re sick, but not getting to the root causes of an illness. The Sistahpreneurs Business Planners are great workbooks designed to help you plan out your key business moves.
So Sistahs – do your homework, design your model, pilot your idea in your environment and context and make smart investments. As an entrepreneur you must build your skills in business design – not just business operation. You must learn to be a master resource manager and designer. Invest in building these skills and over time you’ll build the capacity to run your empire like the boss that you are.
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