It’s inevitable. All entrepreneurs make mistakes of varying degrees during the development of their businesses. In fact, this is a big part of the entrepreneur experience. These failures can be small, like ineffective copy on a landing page that results in poor conversion rates, or they can be massive, like realizing your business model is flawed after you’ve already invested capital.
Inc. recently published their annual list of the fastest growing businesses in America. Of the entrepreneurs who made the top 500, 60% said that this was not the first business they had started. A staggering 76% of those individuals had founded at least two other businesses before they got their current business right. You can read more of Inc.’s findings here.
Running into roadblocks is how you learn. It’s the wake up call you need to change your approach and make adjustments. That’s why the following quote from the great John Wooden is one of my favorites:
“Failure isn’t fatal, but failure to change might be.“ – John Wooden
It’s easy to make mistakes early on in the development of a business because you’re usually learning new skills, while also developing a deeper understanding of your business model and the market as a whole. But, there are unique issues that can arise for online entrepreneurs who are running more established businesses.
1) Losing relevance in the marketplace
With many online businesses, maintaining a connection with your customers and followers can be crucial. This is doubly true for businesses where the brand relies heavily on engaging with the audience through blog, email marketing, or social media outlets. If you take your foot of the gas pedal for too long, followers and potential customers can lose interest in what you’re doing and begin to perceive your business as less relevant (especially given how much competition now exists online). This can affect website traffic, social media engagement, and ultimately your sales. Luckily, you can bounce back from this, but it can take a lot of time, energy and money to get engagement and sales back to where they once were.
2) Failing to adapt to new challenges
If you utilize a business model that has generated revenue for your business in the past, it can be difficult to admit when that model is no longer providing sustainable results. Coming to this realization too late can bring small businesses to their knees, but massive corporations fall prey to the same problems as well. Blockbuster failed to capitalize on the consumer shift to on-demand entertainment and Kodak missed the train when digital photography began to replace film.
In the online entrepreneur community, these challenges tend to be much smaller in scale, such as realizing too late when a product launch is’t going as expected or when affiliate partners are no longer generating revenue like they once did. As Mr. Wooden’s quote says, these missteps aren’t fatal themselves, but failing to find solutions quickly enough can be.
3) Financial irresponsibility
When most entrepreneurs start a business, they spend the majority of their time planning out how they’re going to make money and very little time thinking about how they are going to manage their money. In our experience, taxes tend to be the biggest financial issue that hinders the growth or success of an online business. Often, entrepreneurs dig themselves into such a big hole with back taxes that it becomes a huge source of stress and anxiety, which limits their ability to imagine a brighter future for the business.
In these instances, the problem is usually caused by thinking of the business only from a sales and marketing perspective and neglecting the financial and operational aspects of their business. Generating revenue for your business is certainly important for survival, but knowing how to manage the other aspects of your business – or seeking help from someone who does – can be just as important. If you’d like to learn more about how you can avoid common financial mistakes, check out our blog post from July: The Five Biggest Mistakes Online Entrepreneurs Make with Their Finances.
4) Expecting growth from evergreen products
If you’re unfamiliar with the term “evergreen product,” it’s essentially a digital product (usually an online course or program) that stays in your product line for an indefinite period of time and is continuously promoted throughout the year. An entrepreneur should feel lucky to have a product in their arsenal that they can call evergreen because it can provide a consistent stream of revenue. It’s also validating to know that you’ve created a product with enough value that customers are regularly willing to pull out their wallets to make the purchase.
Where entrepreneurs make mistakes with evergreen products is assuming that they can repeatedly invest the same amount of money into promoting a product and still see flat or increasing sales every month. Whether you’re Apple selling iPhones or a graphic designer selling a Photoshop tutorial, there is a limit to how many people you can sell the exact same product to. Sales will eventually dip, even if you’re spending the same amount of money on promotional and advertising activities. If you have plans to establish an evergreen product in your business, make sure you have a strategy for freshening up and revitalizing the product when sales start to decrease, or be prepared to a launch a new product or service to supplement the dip in sales when the time comes.
5) Lack of drive and focus for the business
Running your own online business can be exhausting. There is a lot of energy that goes into managing the day-to-day operations of running a business, let alone the mental strain of planning future products and services to keep the business thriving. So it’s no surprise when entrepreneurs get burned out and lose enthusiasm for what they’ve created. That’s why it’s so important to find work-life balance that allows you to spend the time needed to support and grow the business while also allowing yourself the time to enjoy the other aspects of living your life. That might mean hiring people to take some of the workload off your plate or scheduling out your vacations way in advance so you have plenty of time to prepare the business for your absence. There’s no magic solution here. It’s up to you to discover what feels right for your situation.
One thing we want to emphasize is that no matter how many books or articles you read in order to prepare yourself for life as an entrepreneur, it’s important to know that you will run into obstacles that are unique to you and your business. That’s why it can sometimes be more effective to take action, make mistakes, quickly fix those mistakes, and then move forward. Chances are those little failures will be far more beneficial than detrimental to the business in the long run.