There are a lot of reasons why businesses, especially online startups, die within the first few months and years of their operation. Business Development, despite having the power of gods, is not immune to imperfection and mistakes.
Every entrepreneur and business owner may make a mistake that sinks the business, but those who are aware of mistakes most failed businesses couldn’t anticipate, they’ll be safe from all the danger that may kill their business.
Today, I’m going to dive into a topic that the success of Business Development depends on. In this post, you will learn the most common mistakes business developers, entrepreneurs, and business owners make that devour their business one way or another.
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I don’t like to sound like an academic article published in a fancy journal with a lot of citations and references. But to become aware of what is going to kill our business, especially in 2021 that everything is sort of competitive, we have to identify the problem that leads to making mistakes in the business development process.
Out of many problems that I know and experienced with countless employers, I’m going to talk about the most critical 2 before start telling you what to avoid. When I say mistakes, I’m not talking about a typo in a business contract.
Small mistakes are common and natural, and trust me, sometimes healthy for development too. What I mean by “Mistakes” are those devastating ones that seem simple in the first place.
The first problem is making mistakes and calling them a mere error or issue that can be identified and solved. When you underestimate mistakes and see all of them as something that can be solved (unlikely), you might be surprised when your business is filing for bankruptcy for all those MERE mistakes.
The second problem is the most irritating one and might be the only reason why I don’t work with every business owner dude that contacts me via Linkedin or Email. The second problem the business developers, who are aware of common mistakes, but with selfish entrepreneurs and stubborn business owners.
Some of them, well, like 90% of them believe they know more than the current barriers and limits of knowledge itself. They think they are Google 2.0! So it’s either their way or the highway, and I choose the latter in case of finding myself in such situations.
I can list more than these two but these two problems alone shape the entire concept of why businesses fail. They fail because business owners are making big mistakes and calling them small and refuse to take advice, to put it in one sentence.
You, as a business developer, should be aware of these common business development mistakes, and choose whether to address them or don’t work with such employers in the first place. The choice is yours and it’s a tough one. I usually assess the situation and employer before signing any business development contract.
11 Mistakes Online Business Startups Make
Anyway, I’m here to tell you what mistakes are common as well as dangerous for businesses. So if you are a business developer, you should be aware of them and learn how to address them based on the context you are working on, and if you are a business owner, you have to change your overall attitude toward some aspects of leadership and management before hitting rock bottom. Hire a business developer to get things sorted out!
1. Unrealistic Goals & Expectations
Thinking unrealistically or having out-of-this-world expectations from your business is the most common dangerous mistake businesses make. It is not limited to businesses and online startups. Many freelancers and self-employed make the same mistake when they are making money online.
This mistake is something that we all experienced at some point in our life. We hear that something is good or something is easy to do or starting a business and managing an online startup is easy. Well, let’s not believe things that we hear, often from motivational speakers, MLM dudes, or “Law of Attraction” gurus. Don’t believe them at all because reality is something totally different from the world they are portraying in their videos, books, and seminars.
When you want to start a business, think logically, do a lot of research, and ask professionals regarding the expectations you should have. If you think your business is going to the moon overnight, it’s wrong. If you think you are going to be a millionaire in a matter of 1 year, you are wrong. Someone told you starting a business and becoming the boss of your own is easy and enjoyable, NO IT’S NOT!
Set real goals for your business and startup to achieve real success. Don’t set your goals based on what you dream or believe. Think logically, like a real business owner. Don’t go with “Fake It Till You Make It”. It’s the worst idealogy you can have. It’s more “fake it till you file for bankruptcy” than “make it”. This “fake it till you make it” lifestyle will lead you to set up unrealistic goals and unreal expectations.
2. Starting Alone!
Do you think you can start a business alone? Wrong! This one is fairly simple to avoid, but why you shouldn’t start alone? Because no one is too perfect to be able to handle it all. No one can do everything, especially when the result shouldn’t be less than perfect.
No successful business today was started by one person. Google, Microsoft, Facebook, Apple, Tesla, SpaceX, Mercedes-Benz, Ford, and many other big names out there started by more than one or two individuals. According to Ernesto Sirolli of Sirolli Institute, a successful business need at least three key individuals in the beginning: One to say what to do, one to say how to do it, and one to take care of the money.
So, if you are starting a business or an online startup, you know what to do, but you may not have the necessary Skills to Develop Businesses and you can’t take care of the money from all aspects. It’s simple. Therefore instead of thinking you can do it alone, go find reliable skilled know-how people who can help you start a business.
This is called the Trinity of Management which is the three fundamental pillars of a fully functioning successful enterprise according to Dr. Siroilli: Product/Service, Marketing, and Financial Management.
Don’t have friends or anyone who can do this with you? Don’t worry. It’s normal considering all the social distancings. Go on linked in, start searching for professionals. Contact them. Befriend them and expand your circle and choose some candidates that fit your project and get on with your project with their help.
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3. Starting Without a Business Plan
The first step to starting a business or starting the process of business development is creating a comprehensive business plan. This part is crucial because a sound business plan proves a detailed roadmap for the success of your business.
In fact, if you start your business with a good business plan, then you won’t encounter many of the mistakes in business development that I’m talking about here in this post.
Why? Because a professional business plan includes a lot of stuff that you have to consider before starting your business. It elaborates, often with extensive research, business niche, business model, budget & expenses, marketing plans, product & service, customer, market, ideas, opportunities, and 420 other items that are vital for your business.
Theoretically, everyone can design a business plan, but the best business plan that considers all aspects are created, only and only, by the gods of business, who are holy business developers. So, either hire one or design a business plan yourself before deciding to run a business. Make everything clear prior to starting spending money, time, and energy!
4. Neglecting Research Phase
When you are buying a bag of chips, you do the research to find the brand that has less air in it and, of course, tastes better! So why not research for starting a business?
I’ve seen hundreds of startups fail because they went with an idea without proper research, and ended up broke after a short time. You have to research everything imaginable about the business or idea you have in your mind. Mistakes of this kind in business development are often underestimated by new entrepreneurs. Don’t underestimate the power of research & development (R&D).
You have to (at least) research the following things at the beginning of your startup:
- Which Niche is better for your business. (Don’t start a business because of a FAD #SHIB)
- Product or Service you are going to sell.
- Market(s) you are going to sell in.
- Target Customer you are going to sell to.
- What Business Model fits better for you.
- What Marketing Strategy you need.
- Resources you are going to need to run your startup
- The Budget you are going to need to start the business.
- Projections of your business in the future.
There are a lot of other things to do, but these few are a good start for R&D. The first 3 take a good amount of time to finish so don’t underestimate research!
5. Choosing the Wrong Niche
The niche you choose is important because it defines the future of your business and profitability. Niche defined the demand for your business (product or service your selling) and the competition you are going to have with your rivals.
A good niche is a combination of high demands and low (healthy) competition so choose wisely. If a niche is something closer to a fad or just a quick trend, it’s better to avoid it because sooner or later it will finish and all your efforts would be in vain.
Research is really important in determining the niche of your business. An uptrend that is gaining popularity over time is the perfect condition for a niche. Avoid downtrends and obsolete niches that there is no future for them. If you start a business in the wrong niche, a world of problems awaits you on the other side of rock bottom!
Some examples of good uptrend niches:
- AI (Artificial Intelligence)
- Cryptocurrency and Blockchain Technology
- Big Data Providers
- Business Automation Services
- Ideas Involving 3D Printing
- AR, VR, or Other Extended Realities
- Drones & Robotics
Some examples of downtrend niches to avoid (+ Reasons):
- Food/Grocery Delivery App Startups (Saturated Market – High Competition)
- Taxi Booking and Courier Services (Saturated Market – High Competition)
- Selling Useless Stuff like Fidget Spinners (Low-to-None Demand)
- MLM, Pyramid, and Ponzi Shenanigans (They just Sound Stupid!)
Read More: How Not to Make Money Online
6. Choosing the Wrong Business Model
Let me clarify first. The business model is what defines how your business makes money. is it by selling products or services to end-users, to other businesses, or acting as an escrow? Respectively, they are called B2C (Business to Customer), B2B (Business to Business), or C2C (Customer to Customer).
These three are the most common business models, not to be mistaken for common monetization models for businesses that include freemium, subscription, advertisements, etc.
Your business, in general, makes money either by selling a service, or a product. Even when your business acts as an escrow, it provides an escrow service. A business model, actually, defines your customer range between being other businesses or end-customers, or sometimes between 2 businesses or 2 customers (in the C2C model).
If you don’t do extensive research when you are selecting your business model, you are making the biggest mistake possible in the history of business development, because you are playing with your source of revenue! So don’t do that!
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7. Overspending or Underspending
A big part of every startup and successful business is to pay for different stuff that improves the business efficiently. That means spending money for the business to see growth and make more money in return. These are the unavoidable expenses all businesses have.
Spending is easy, of course, but knowing how much to spend is rather hard. Many entrepreneurs and business owners make this stupid mistake almost every time they want to spend on their business. Sometimes, they look at this expense as regular money they have, and sometimes they look at it as a firm investment.
The former is not spending enough and being stingy about it (Underspend) and the latter is carelessly all-in hoping for some miracle (Overspending). Both mistakes are the killer of any business development effort.
Actually, the line between overspending and understanding is so thin that is not visible to the naked eyes, or in this case, minds. The thin line is the right-spending which is so hard to walk on. It is rare to estimate the right amount of money to pay for something, even for top professionals.
But while newcomers are likely to overestimate (or underestimate) this amount, professionals do a lot of research prior to making any decisions regarding spending money, especially large amounts. Walking on the thin line of right-spending is hard but estimation can close the gap between the spending mistakes.
“How to estimate correctly?” you might ask. It requires a tremendous amount of experience to know the right price for what you are paying for your business improvement. There is no fixed formula or cheat sheet to refer to in such situations. Only experience can help you regarding this matter.
Budget management and market research skills come to your rescue in such situations and consulting business developers could broaden your insight for making financial decisions. But if you go blindly and rain money on others, the next thing you see is the bankruptcy lawyers!
8. Choosing the Wrong Marketing Strategy
I can say that the root of all evil and the source of all income comes from marketing. It is a double-edged sword that you can use to make money or cut your throat.
Marketing is a large and complicated topic the scope of which is outside this post. Marketing requires extensive research that takes longer than the formation of the universe itself, well if you do it, but it takes a couple of weeks if you outsource it to a marketing expert.
Out of the 42069 different marketing strategies that exist today, maybe a few (two or three in most cases) can fit your business model and goals. This is where you have to choose wisely. If you choose the wrong marketing strategy, two outcomes wait for you on the other side of the campaigns.
- Firstly, you might choose a strategy and invest a lot of money to run it hoping to make money. If it is a wrong strategy, then you hardly see any result because you targeted the wrong markets or demographics or other stuff. In this case, kiss your business goodbye and start all over again if you still have some dimes in your pocket.
- Secondly, a wrong strategy may still work for you but at the cost of cutting profit margins to a point where your costs match your expenses and you made literally nothing. In this case, research more on marketing and change it for good.
If you want to avoid such mistakes in the process of business development, then you can either start becoming a marketing expert, which takes 666 years, or you can hire one, which takes 4 minutes and 20 seconds to find one on Linkedin.
9. Avoiding New Technologies
There are a lot of mistakes in the development of any kind of business or online startup. While many of them are being inexperienced or stubborn as an entrepreneur, some are related to the fear of new things or avoiding new stuff.
Starting a business or running an online startup has never been easier. You can, literally, sell a pair of shoes to your customer and understand his/her eating habits, health problems, or fashion preferences via retargeting & remarketing.
Thanks to almost non-existence privacy policies (that we never read but accept) on eCommerce stores, you can technically force your customer to purchase something (s)he refused to buy too many times. Why? Because he made a big mistake of buying something online and now his entire internet browser history and cookies are at the online store owner’s disposal to run all sort of marketing campaigns targeted directly to him/her.
This is the power of new technologies that allow you to make a lot more money, more than sense in fact. But why not all online store owners make 6 figures? Because they avoid these new technologies, or these big data and analytics services, that help you market your stuff to anyone who is connected to the internet.
If you avoid using new technologies, you are making one of the top business development mistakes. You are losing an unbelievable opportunity. If you want to stay in the game, you have to compete and to do that, you should utilize new technologies one way or another.
Are going to avoid new stuff now? Are you still afraid of trying new things? Use all tools and services to get the most out of your business. They let you gain a deeper insight into your products, services, customers, and markets. In simple words, they help you make more money!
10. Avoiding Business Automation
A big difference between making money online by doing freelance jobs and starting a business is that the former brings you money as long as you do them and the latter brings you money even if you don’t do much when the business is self-sustainable.
When you stop doing freelance and online works, money flow stops, but with businesses, you try hard at first and reach a level that you don’t need to do anything but money still comes. How? Because of business automation. To put it into perspective, you outsource works to others, whether employees or other third parties and only manage them.
At first, of course, you have to do a lot of work and handle lots of stuff, but later in the process of business development, if you don’t make such mistakes, you barely need to do anything and the money will flow into your business.
As businesses develop, tasks that were important at first become a regular routine that can be handled by others. This is where business automation helps you as an entrepreneur or business owner to free your mind from routine stuff and focus on other important things like management, marketing, and new ideas.
If you find business automation a little too pricy or if you don’t trust others to do the job right, then you’re a fool. Business automation speeds things up, especially when you used to do 10 things at a time and now 10 employees do them individually.
If you hired the right people for the job, no only your business grows faster, but also you’ll make a lot more money than business automation costs become a tiny fraction of that profit. So don’t make this mistake and automate your business when everything is working flawlessly.
11. Avoiding Optimization
The last mistake that many business owners, even professional ones, usually forget is optimization. I’ve seen the lack of optimization in different sections of a business. This is actually a world of mistakes and not just something you can fix in a blink of an eye in the complex process of business development.
Optimization is not just SEO or marketing-related stuff. Optimization involves all stages and phases of a business. SEO and marketing are just a small part of it, though most useful for online businesses. However, production, distribution, sales, support, and the overall management in the business require optimization too.
The benefits of business optimization go beyond the scope of this post. It helps your business gain more traffic, find more customers, make more sales, and make more money. In addition, optimization in other sections of business is considered a perfect cost-cutting solution as well as a process booster that speeds things up.
Optimization is usually neglected but it’s too crucial to let your business operates without it. So don’t make this mistake and start working on your business optimization from all sides too.
Without optimization, you might spend a lot of resources and getting your result. In fact, optimization allows you to spend less and expect more, so I’m sure you’re not going to underestimate it now!
Can Online Businesses Avoid These Mistakes?
This question comes with two answers. A short one and a long one.
Short Answer: Yes, they can!
Long Answer: It highly depends on the business owner or the entrepreneur. The overall answer is still yes but if the business owner is ready to accept some facts and be flexible of decisions. At the beginning of this article, I talked about two problems that cause these mistakes. One is underestimating the issues, and two being stubborn & selfish. If entrepreneurs overcome these two simple problems and start working alongside business developers, everything could be handled beautifully even if the business has suffered from these mistakes for a long time.
That’s not hard, right? It depends on you as a business owner or on your employer if you are a business developer.
Overall, handling such issues is possible, and may take some time if the business is already expanded. But, if the employer is stubborn or selfish, it takes a lot longer for them to stop selfishness.
If you are in such a situation, and a stubborn business owner wants you to do something, make everything clear about their potential meddling and interference with the process first.
I’ve always hated writing conclusions for my posts. What is the point of it? It’s not an academic article but a friendly educational post to teach a thing or two about business development. Anyway, I guess I have to do it for the sake of “Algorithms”, who are becoming more and more sensitive these days BTW.
In this post, we talked about the most common mistakes in the process of business development that businesses and online startups make and mistakes that can potentially ground those businesses. Out of my experience, up until this year, there are 11 of them that businesses suffer from here and there.
They can be avoided. There are ways to tackle such mistakes and improve the business by employing different techniques to overcoming such issues, but in general, it is up to the business owner or the entrepreneur to really want to make their businesses better.
If you know any other mistake that businesses are prone to make, or if you have encountered some when you were working for different employers, feel free to leave a comment and tell everyone what it was and how did you manage it.
If you are a business owner and your business is potentially suffering from one of these problems, leave a comment down below and let me help you fix your business.
Thanks and good luck!