There are only a few things that are certain in life that I think we can all agree on. The 2 common things, death and taxes… but if you’re starting a business or are a business owner there’s another certainty you should expect and that is the fact that you’re going to make mistakes.
In this post you’re going to learn:
- Common mistakes made when starting a business
- Common mistakes made specifically in web design and SEO businesses
- How to avoid those mistakes
- How to grow your business faster
10 Rookie Mistakes I Made When I First Started
These 10 mistakes are made not just by me but I see these mistakes made by a lot of people in different fields.
I think this post could easily be titled 1,000 mistakes made in business but I don’t think you want to read a 100,000 word novel posing as a blog post, and I certainly don’t want to type out ALL of that either!
So let’s get started into this list of 10 major mistakes so you can be ahead of the curve!
Mistake 1: Relying On One Method of Lead Generation
I know this should be an obvious one but it really isn’t.
If you avoided this mistake, it doesn’t mean you came out ahead.
People often fall into one of two camps. The first camp being that you relied on just one method of lead generation, and the second camp is that you had multiple streams of lead generation you were attempting but not effective at it!
We always hear how we should diversify income, diversify your business and diversify your marketing strategy. However, the people telling you that are forgetting to mention that you diversify in order to minimize risk and maximize profits. When you’re starting out, you have nothing to diversify, you’re not efficient or effective enough in your marketing to be able to do that.
My mistake however was that I relied on one method for too long without diversifying once I mastered that method.
I recently wrote about cold calling and why it may not be right for you or your business. One of the arguments I made was that you can’t effectively scale cold calling as you grow unless you have an actual team. Another argument I made was that when you stop cold calling you stop generating leads.
So what do you do?
The way to avoid this mistake isn’t to immediately diversify your lead generation efforts. You have to first be able to generate leads and have a proven system with whatever method you use. Once you have mastered that method, it’s time to start learning another method to add to your lead generation strategy.
A good way to tell if you’re ready to diversify or not is to look at the revenue. Are you plateauing when it comes to new sales? If so, it’s time to add a new method.
Mistake 2: Not Automating Email Marketing… or Using Automation At All
I remember the days of scouring Craigslist and manually responding to ads across the country. I remember spending time searching Google for different businesses and manually emailing businesses to try and generate some sales.
It was time consuming.
It was tiring.
Worst of all… the results were pretty bad.
If I would have started scraping emails with a tool like Mobile Renegade and used a more automated way to market to those businesses I would have had much earlier growth in sales along with more time to focus on the bigger aspects of my business instead of tedious tasks.
Cold emailing is a numbers game. It’s about volume. The more you send the better you will do.
Spending all that time manually emailing seems like such a waste now but so many people are still doing it.
When I automated my email marketing I saw a lot of success from it and it was something that could be set and forgot. You can schedule months of emails to go out just by investing a couple of hours.
You can’t do that when you’re emailing all these businesses manually.
For those that don’t use email marketing as part of your lead generation strategy, perhaps the better argument here instead of manual vs. automated emailing is the fact you should be focusing on more automated marketing and lead generation opportunities.
Mistake 3: Ignoring Recurring Income
This is really embarrassing to admit to you all.
When I started out offering Web Design services I made a pretty big mistake by not bringing in recurring income.
It was so stupid of me.
How difficult is it to add on hosting for those clients?
It took me a long time to start offering recurring services like hosting, SEO, and other monthly services I could charge for.
Eventually I started charging $350/year for hosting and maintenance. The maintenance included unlimited text changes and occasionally coupons and swapping out images here and there. I’ve tested out a lot of prices for hosting but have found the $350/year pricing point is pretty good for most businesses.
Adding the recurring income really helped stabilize my business. It doesn’t take many sales to make a big difference in your company.
This isn’t necessarily just about web design and SEO companies… This is something that’s ignored in many companies in many different industries!
What can you do to boost your income? Can you offer some sort of monthly or quarterly service?
Mistake 4: Ignoring The Power of Referrals
Starting out I didn’t know much about doing business. I knew a few things here and there and learned a lot along the way but I didn’t understand how to get referrals.
Perhaps it wasn’t really me not understanding how, I just didn’t place much importance on it.
It wasn’t until over a year after starting out that I really saw how important and how beneficial it could be to get referrals and then implement a strategy to boost referrals from existing customers.
I remember getting a couple very large jobs from a customer that referred people to me.
After that happened, I started calling clients and asking them for referrals. You just have to ask!
If they’re happy, they usually are also happy to give you the information of a buddy or family member that has their own business.
For someone actively getting referrals from clients, it could add a 25% boost in revenue for you on the low end!
Mistake 5: Not Having a Back Up Plan for Payment Processing
I can not stress this enough. If you are using PayPal for all of your payment processing needs then you are at risk of losing your money and losing out on sales if something happens.
PayPal shuts down accounts every day. In fact, I’ve had multiple readers of this blog contact me, saying that PayPal shut them down and they don’t know what to do.
PayPal sucks. Some people will try blaming you for getting your account limited or shut down but those people are idiots. PayPal can shut you down if they don’t like your credit score, if they don’t like the amount your processing, the amount of transactions you process, or the type of service you offer. If your refund rate is high, if you get chargebacks, or just because they determine you to be in a high risk location or have a client that pays you and that client is considered high risk you can get shut down.
Do not depend on PayPal. I’m not saying you shouldn’t use them… I’m just saying to have a back up plan.
For me, I like to process checks over the phone. I don’t need to worry about them sending checks, I just need their information on the front of the check and I can process it. Some people like echecks but you’re still subject to the same processing limits and risk as a regular merchant account. What I do is a check draft.. very safe, no fees.
If you process payments with PayPal, you should maybe look into other options as a backup. For example, Stripe is a good option if you need to process credit cards. Or you can have PayPal, Stripe, and a real merchant account so you have multiple options available in case something bad happens.
People often ignore the importance of payment processing… until you’re in a position to where you can’t make money because you can’t process payments!
Think ahead… minimize your risk.
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Mistake 6: Not Incorporating Soon Enough
I made this mistake but it probably wasn’t as big of a mistake as it could be for some of you, especially in the USA. I don’t know the laws in other countries or the business formations you can take advantage of but in the US this can be very important.
I didn’t have a lot of assets when I first started. I didn’t own my own home, I didn’t have anything of real value so if I got sued for some reason there wasn’t exactly much anyone could do.
Do you have a family to support? Work vehicles? Do you own your house, property, office, etc.?
Incorporating or forming an LLC is something you should look into.
It isn’t just about minimizing risk though, you can take advantage of building business or corporate credit.
You can also take advantage of certain tax laws like if you form an S-Corporation and pay yourself a “reasonable wage” then take the rest of the profits as distribution to save you on the self employment tax.
It’s easy to do it yourself, and it’s pretty cheap in most cases. However, I do recommend talking to a CPA to see what formation would be best for your specific circumstance.
Mistake 7: Not Having a REAL Fulfillment Strategy in Place
A lot of people are looking at the first step… sales.
When you have sales though you need to fulfill those sales and you need to have a real fulfillment plan in place.
I didn’t have that plan.
Maybe you’re thinking, well that’s easy, I make a sale and then I outsource to this person and I just relay things back and forth from the outsourcer to the client and vice versa.
That’s not a plan.
That’s what I did for a very long time. I had no real project management plan or strategy in place. I didn’t have a process in place to help me from project to project. I didn’t have a set structure that I worked with and repeated time and time again and it hurt me.
I remember the days of sending tons of emails to people I outsourced to, lots of skype messages, no real documentation of progress and projects got lost in the shuffle. In fact, I remember numerous times where I forgot I even had a certain project until the client called me a month later.
Here’s a few ways to learn from my mistakes in project management:
- Start using a project management platform. One I really like is TeamWork, they have a free plan but even as you graduate from the free plan it is packed with features and still pretty affordable.
- Create a template of common tasks you complete in a job from project to project. Once you have a template you can create task lists and automate the outsourcing of those tasks to your team through a project management platform like TeamWork.
- Split up the work between workers. If you offer web design, split the project up with 3 workers. 1 working on graphics, another working on css modifications and forms, and another working on grunt work like adding content, menu items, etc. This way your workers are used to specific tasks and it maximizes productivity. Outsourcing the entire project to one person is less efficient and leaves you with higher risk.
Mistake 8: Lack Of Followup with Existing Clients and Leads
Another mistake made that seems like a no brainer.
You have to follow up.
When you generate a lead, you need to keep that lead warm and continue following up.
Implementing a lead nurturing plan or strategy is a good way to non-abrasively keep in touch with that lead and make sure you’re still in their head even months without talking to them.
Some leads just aren’t ready to buy right now. You have to stay in touch though, there have been many times that leads have ended up buying 6 months or even a year after first speaking with them.
It isn’t just about leads though, it’s about your existing client base.
If you don’t follow up with clients and continue to make sure they’re happy, they will leave and go to someone else.
Having a good follow up strategy allows you to maximize your lead conversions, as well as maximize your opportunities with the existing client base through upselling services or generating referrals. It will also increase the average life of a client.
Mistake 9: Not Managing My Time Well Enough
Time management has never been a strong suit and when I started out it was a big problem for me.
Perhaps it is undiagnosed ADHD and I easily get sidetracked, or maybe it’s just a lack of a time management plan.
Most people are losing a lot of time with unproductive activities.
One recommendation I have for you all is to use this cool app called Toggl.
It’s a time tracking app and I recommend you use it (it’s free) to track your existing activities. Use it for just one week, work like you normally do, but log absolutely everything. Log smoke breaks, bathroom breaks, lunch, dinner, walks, sleep, facebook, twitter, youtube. Log everything so you can see exactly how much time you’re spending on a daily basis.
Don’t cheat… you’re only cheating yourself.
After one week, you will be able to analyze the time you’ve invested in different areas.
Every 3 or 4 months I do a 1 week Toggl experiment so I can adjust my productivity and make sure I limit the time wasting activities.
Want to know one of the biggest time management tips? Stop multi-tasking.
Sounds weird right?
When I stopped multi-tasking and just focused on one high impact task at a time, my productivity and time management was in a much better place.
Don’t make the mistake thinking you can multi task facebook, Skype, and a project you’re working on or a blog post you’re writing. It doesn’t work out very well.
Mistake 10: Not Replacing Myself Time and Time Again
A lot of people would think this is about outsourcing but that is too broad of a topic but also a limited way of thinking about this.
It isn’t just about outsourcing to create time for yourself.
It is about replacing yourself in certain activities so you can focus that added time into a higher ROI activity.
How profitable is it for you to be spending an hour a day building citations for your local SEO clients?
Couldn’t you replace yourself in that area for less than $5/hr each day so you can spend that hour on something that can generate revenue for yourself?
What are the common tasks you perform on a daily basis? How many of those tasks are revenue generating activities that bring an ROI on your time invested?
You don’t outsource projects in order to replace yourself. You replace yourself my outsourcing certain activities that you regularly perform that aren’t providing an ROI on your time.
Being able to successfully replace yourself in your business, is not a one time event, it happens over and over again and is the key to successful growth of your company.
This sort of goes back to automation and its’ role in your business. The purpose is not so you work less or can sit on the couch doing nothing while money rolls in. If you successfully replace yourself, you don’t save time, you just refocus your time in different areas.
The purpose… is growth and profit and providing a better return on your time investment.
Bottom Line
Mistakes are common in business and there are many more mistakes you can make than what is listed here but these 10 common mistakes are something you can avoid.
You should now know what to look for and know how to adjust to avoid these mistakes and come out ahead.
What are some of the mistakes you’ve made along the way? Have you made some of the same mistakes as me? Let me know!
#4 is big. Referrals are extremely important in my business. $0 acquisition cost and 100% close rate. My mistake was not realizing that sometimes people need a push. People loved my work, but they really didn’t care to actively promote it. So I started a referral program offering Visa gift cards for referrals to friends and family, it worked out great (and still does).
As for my own mistake, I did what a lot (maybe most?) people do when starting out in business: I didn’t know what my service was worth, I charged too little, and then when I wasn’t getting enough work I charged less- which is why so many small businesses fail so soon.
Once I realize my actual costs, including overhead and (the BIG one) unbillable time, and after I realized that as a professional my service have a great value, I started charging what I needed to succeed instead of scrape by.
This post has been really helpful for me.
I honestly recognize in many mistakes explained here.
Even tough I’m having some “success” in my country with my web agency, I can honesty stay that I should do less mistakes in order to really grow it and start making REAL profit.
I am doing the mistakes pointed out in :
1- I’m relying mostly on cold calling/networking/some manual email marketing.
As you mentioned, this kind of business it’s not sustainable long term neither easy to be scaled up. I’ll take action and fix this now, in these days.
2- For this point, I’m kind of discouraged by the fact that we (in Italy) don’t have valid email scrapers (or at least I didn’t found one yet) and because I’m not sure about how could I automate it. I’m not even practical about mailchimp or the other email services yet. I am going to buy the email ice cold guide asap in order to avoid this mistake too.
5- As soon as I read this blog post I tried Stripe and now I also have verified my account 🙂 (you know the problems I had with paypal and still have).
Hope Stripe works fine :).
7- I’m making this mistake too, mostly because of the lack of time necessary to actually set up a fullfilment plan. I always found it time consuming (maybe I complicate the things too much? or should I hire someone to make the business plans? I also have to try the “work-template” way, even tough it often happens that we create custom plans of actions for our leads basing on what is their niche)
8- I sometime forget to follow up with some really cold client so after reading this blog post I started organizing the follow ups too (before I wasn’t).
10- I’m not automating many things that maybe could be automated. Should fix this soon too :).
Thank you Nathan for this awesome post. It really helped me and will help alot in the next days while I will start implementing each advice you just gave us.
Does using thumbnails of hot girls increase hits? Haha. Hope you are doing well. Keep up the good work.
LOL. Yeah, it does, especially increases CTR when shared on Facebook or Google+.