Costly start-up mistakes I made–and how to avoid them
When I planned my business, I created a checklist of things I thought I needed to do before I was officially open for business. Since this was my first business, I didn’t know what I was doing, and ended up wasting a ton of time and money on non-essential tasks. Here’s how to avoid my mistakes.
What you should focus on
When you’re starting your consulting or freelance business, the ONLY things you should spend your time on are tasks that will bring in cash. Ignore everything else–for the moment.
I know this sounds simplistic–and it is. But if you ruthlessly cut out tasks that don’t bring in cash, you’ll pare down your to-do list so that you start generating cash sooner.
You might have a tough time deciding what tasks aren’t essential. That’s OK. Keep asking yourself if each task will directly lead to bringing in cash. If you hear yourself rationalizing that the task is somehow related to bringing in cash or that the task might lead to business down the road, chances are that it’s non-essential–at least for your initial start-up phase.
I talk more about this in the Start-Up Blueprint, as well as exactly how you can research a profitable niche so you aren’t targeting a market that doesn’t exist, isn’t big enough, or isn’t profitable enough to create a viable business.
What you can ignore–for now
So what can you ignore?
First of all, it’s important to recognize that there’s some ambiguity here–especially when it comes to marketing tasks. That’s because some of your marketing efforts won’t immediately bring in clients, although they’re really important. A lot of marketing tasks take time, and as I’ve mentioned elsewhere, marketing is like growing an orchard: you plant seeds, nurture them, and over time, you’ll have a reliable source of business.
That said, for your very first tasks, you may want to hold off on planting some of those seeds until you snag your first clients. This decision will depend on your niche. If you think it’ll be more fruitful to get clients from a website, then you could justify building a website first. For most niches though, phone and/or in-person marketing efforts will probably pay off quicker. And fast is what you’re aiming for at the very beginning.
What I wasted my time on
Being cautious and not knowing what I was doing wasted a lot of time and money. Analyzing and researching stuff is easy & safe, but it won’t bring in cash. I spent a bunch of time & money doing stuff that I didn’t need and never generated any cash. Things like:
|Task||Hours Wasted||Money Wasted|
|Research & set up s-corp||20||$300.00|
|Create snazzy brochures||15||$100.00|
|Calculate cost & profit for employees||2|
|Research & set up SEP-IRA (retirement plan)||4|
|Figure out how to secure my intellectual property (my software code)||6|
|Determine commonly requested project types||2|
|Choose name for repeatable tools||1|
|Determine short- and intermediate-term client needs/assignments||2|
|Create list of tools & tricks that can be used for client projects and repeatable solutions brainstorming||2|
|Get business cards||2||$40.00|
|Brainstorm list of customer appreciation items||1|
|Determine business knowledge needs and planning||1|
|Determine website add-on functionality needed||1|
Holy crap! Since I was spending maybe 6 hours a week on this, that’s roughly 12 weeks of wasted time. If I had spent that time on cash-producing tasks, I could have started collecting cash 3 months sooner.
This is actually the first time I’ve tallied up these time- and money-wasters, and it’s pretty appalling.
As for researching and setting up my s-corp, I didn’t need to do that right away, and I talk about that in more detail in the Start-up Blueprint. Incidentally, the cost of the Start-up Blueprint is just a tiny fraction of the $515 that I wasted on non-essential tasks–and the blueprint will show you exactly what you SHOULD focus on.
And if you buy the Start-up Blueprint before midnight Tuesday, December 13th, you get 40% off. Woohoo!
Anywho, this cautionary tale is meant to get you focused on the tendency you might have to waste time & money on non-essential tasks. Instead, make sure you’re laser-focused on ONLY those things that will start bringing in cash. Once you have your first client or 3, then you can start thinking about your next, perhaps less essential tasks.
Oh, and did I mention the Start-up Blueprint? 🙂