On today’s Black Entrepreneur Blueprint podcast episode # 402, Jay discusses five mistakes that entrepreneurs make that can literally cost them their business – and how to avoid them.
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BLACK ENTREPRENEUR BLUEPRINT SHOW NOTES – EPISODE # 402
The first thing I want to discuss that is not really a “dumb” thing is “Not Starting Your Business.” You can’t fail or succeed if you never start. So, stop playing games and do something. The time is never going to be optimal, so just do it now. The faster you start, the faster you’ll learn.
#1 – You Don’t Have Proof of Concept
In order to build a viable business, you have to have proof of concept before you invest your time, money, and resources into a project. The true proof of concept comes from a customer going into their pocket to buy your product or service.
How do you get proof of concept?
- You create a minimum viable product to test before you go all in. Example: (my supplement that I tested without buying the product). (My buddy buying 5000 razor blades without testing first).
- Somebody else is doing it successfully (make sure that you are comparing yourself to a similar sized organization or company (you may not have the resources or economies of scale as other companies which allows them to be profitable). Example: you sell handmade baskets but you have to sell them at twice the amount a retail chain store does because you can’t buy the volume they do which allows them to get each basket at a much lower cost.
#2 – You Have No Idea How To Market Your Product or Service Effectively
We are all in the marketing business, It doesn’t matter what product or service you sell. He who markets the best will usually win. Many business owners don’t have a marketing system written down and don’t know how to create one. You have to be able to market your product or service profitably, you can’t spend more than you make.
How do you build a marketing system?
- Build a platform to communicate with your audience. You need to start building your platform in advance of starting your business. Your platform could be a podcast, a newsletter, an email list, a website, or video content. But you must own the platform – social media is great, but you don’t own it. Leverage social media to build your platform.
- Generate leads on a consistent basis – The first system you build is a lead generation system that gives you a predictable amount of leads every day. Example: IG/FB ads that lead to a landing page that has a lead magnet attached – get their name and email address and build your list.
#3 – You Aren’t Clear About Who You Serve And The ONE Outcome You Provide
Many business owners start out without a clear target market and a clear outcome for that target market. One outcome for one target market. Don’t mix messages and outcomes for multiple target markets. You must be clear and concise.
How To Create A Clear Message And Outcome?
- Identify your most ideal target market and identify the outcome that target market will receive. Example: I do group coaching for entrepreneurs, but I had to focus on one particular outcome for entrepreneurs and my outcome is “scaling your business.” Not, how to create a marketing system, or how to find a winning product or service? I had to find the one outcome and focus on that.
#4 – You Give Up Too Much Equity When You Start Your Business
When you start a business, many times we don’t have a lot of money. So, in exchange for paying someone, you may give them equity in your business. I’ve seen people give away 40% of their company for $10,000 because they were desperate. Bad move that you will probably resent in the future. Example: Marc G with the Zulu condoms logo %15.
How To Build A Company Without Giving Up Too Much Equity?
- Instead of giving up equity, structure the investment as a loan that you will pay back over time
- Create a barter situation where you give them something for their work. Example: If you’re building an ecommerce business and you need a professional website design, maybe you can agree to put the web designer’s info on your website and market their business through correspondence to your audience.
#5 – You Don’t Pick Equally Yoked Partners To Partner With
Partnerships can make or break your business. Many times we choose business partners based on our relationship with them as opposed to if they’re a good fit. Your business partner should complement you and vice versa – are they strong where you are weak, etc.? Many times, one partner will feel like their doing more than the other.
How To Find Equally Yoked Partners?
- Make sure you both have the same goals and objectives for the business. Example: The bamboo pillow story.
- Understand your partners financial needs – do they need to draw income from the business right away or are they willing to defer compensation until your business is able to provide it without crippling the business. Example: Tee and his partner who has a full-time job
- Define your rolls, responsibilities, and expectations before hand and make sure they are written down and signed off on.
- Always Have A Separation Agreement before you partner – make sure this is done in writing so all parties know the procedures and what they will receive if the partnership dissolves.
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