Starting your own business is not easy. The motivation and inspiration for starting your own thing might be really strong, but regardless of their magnitude, usually what follows is a road full with obstacles and many failures. Fear not however, as all of these are a necessary part of every entrepreneur’s journey to success. The mistakes and failures can make you stronger, but it won’t be easy.
To further complicate things when your business is solely online, everyone can see what you’re doing, and this makes your initiative even scarier. There are many good sides to it as well, such as the opportunity to acquire many customers, partner with suppliers, and collaborate with many stakeholders. Nowadays anyone can start their own business, even a work-from-home mummy sitting in her pyjamas that often happens to end up earning more than her husband.
Even though I’ve succeeded in most of my online ventures, I did have many failures along the way. And the strangest part is – the mistakes were in the from the “online realm”! The following are the 3 biggest mistakes I made when starting my online business.
- Bad Money Management
In the beginnings, I had revenue coming every now and then. My plan was to set myself up as a Sole Trader but I didn’t do it. Being a sole trader means that I need to pay taxes the same way an individual has to, hence, all my earnings ended up in my personal savings bank account and I spent them just as I spend my other personal income.
I didn’t consider the consequences of the opportunity to withheld income tax from my profits. This usually happens naturally when you’re employed, as your employer is the person doing everything for you, however, this is not the case when you start your online business.
This was a hard lesson when at the end of the year I was landed with an $13 500 tax bill. The worst part? I was not even monitoring my finances, without having any records whatsoever.
Solution? – Get an accountant and listen to what he or she has to say!
- Choosing to Collaborate with the Wrong People
In the beginnings of my business, I used to do business with anyone coming my way. This usually happens because of poor planning, and, well, we need the money, right? A friend refers us to someone, or they are a friend so we feel an obligation to them, and after all, some extra experience wouldn’t hurt us, right?
I can write an entire book of how many clients I took on were simply a terrible mistake! First of all, I was not competent to deliver the service at times. Sometimes I delivered the service, however, the client would then say this was not what he or she had in mind in the first place.
Here’s how to avoid these mistakes:
- Have clarity and precisely defined goals and objectives from any business endeavor, and agree upon this with your clients.
- ASK your client if he or she understands precisely what’s about to be delivered, i.e. clarify the expectations.
- Be careful when you do business with friends and relatives, and take it as such – as a business!
These were my 2 biggest mistakes when I was starting out my online business. Sure, there were many more, but I believe that these two summarize in a great way what could potentially be a good learning experience for you.
What about you? What were YOUR biggest mistakes when starting your own thing?
— BANC BUSINESS ANGELS (@BANCBA) 28 de junio de 2017