10 Beginning Micro-Entrepreneur Pitfalls to Avoid
When you’re starting a micro-entrepreneur enterprise, inexperience can be a stumbling block. Here are ten pitfalls that beginners often make and ways to avoid them.
Understand yourself as an entrepreneur
Some individuals start a business and then stop doing it — and then repeat the process. They may end up blaming bad luck or some other factor. But before you spend time, money, effort, and energy launching a business spend some quality time on figuring out who you are as a businessperson.
Listen to the entrepreneurial marketplace
Before you begin your career as a micro-entrepreneur, make sure that the market you’re looking to succeed in is large enough to give you the income you seek. Even if you choose to do something that you like to do, you want to also check whether the market will enjoy what you’re offering.
Don’t just investigate the quality of the market; but consider its size. If you plan to offer a product or service and envision that your enterprise will grow enough to give you a full-time income, you want to ensure that your market is big enough to sustain such an income.
Check what other entrepreneurs do
Keep an eye open on what other micro-entrepreneurs are already doing when you’re considering your plans. If you want to set up a blog as your enterprise, for example, then visit successful blogs to see what they do.
Ask yourself such questions as what they do, how they do it, how they pitch their offering, whether they make it interactive for visitors and guests, and whether you can pick up any marketing tips simply by watching their efforts to make money.
Don’t act without planning
To avoid common mistakes, do some planning before you make important decisions, and check out the following sources of information.
The library: Ask the reference librarian about business start-up resources and guidebooks, including the Encyclopedia of Associations by Gale Research. Virtually every industry and business niche has an association, and most of them are listed there.
Small Business Administration: Whether you visit the SBA in person or on its website, the SBA has multiple resources for better planning for your small business. The SBA also works with the Service Corps of Retired Executives (SCORE), which has many retired business folks that give free advice to startup businesses.
The SBA also has business start-up kits that include checklists and sample business plans. These kits usually include full information on what licenses and permits you may need.
Get educated on entrepreneurial business skills
Take any simple function (such as create a web page, do a cold call, or how to do a press release) and put the description into YouTube or tutorial sites such as Good-Tutorials, Videojug, About.com, or eHow.
You don’t have to know everything, but it’s good to be as proficient as possible at those tasks necessary for your business success. In addition, it’s good to know what tasks you can’t do or prefer not to do (you can outsource these tasks).
Don’t spend too much money starting an entrepreneurial business
Too many times beginning micro-entrepreneurs spend money on needless services and products and have little left for what really matters, such as advertising and technical support. Track your expenses and manage your cash flow with some good accounting software or the services of a bookkeeper or accountant.
Stick to one specialty
Because hopping from one thing to another is easy, you may be tempted to try to do many things or sell many different things to hopefully increase the chance of success. Unfortunately, successful businesses are the ones that specialize.
Making sure you know everything about one product, service, or theme has been the ongoing of success for home businesses. For instance, if you’re selling books, then stick to books until you make the venture profitable. You can expand later (as long as what you expand into has a logical connection to your original specialty).
Repeat your successes
Success is oftentimes difficult to achieve and maintain. So after you have a successful moment in your business — your first sale or gaining your first client — think of the process that you undertook to realize that small (and very significant!) successful step. Try to repeat the process and gain the second sale and/or gain another client.
Pay attention to what your customers tell you
Make sure you pay attention to your customers and what they directly or indirectly tell you and figure out the reason why they bought something from you in the first place.
Don’t be bashful about asking after the sale why your customer made the purchase. You want to find out from actual buyers why they decided to buy something from you. Sometimes a single reason or buyer insight can help tremendously in your succeeding again. The only way to find out is to ask.
In addition, those individuals that don’t buy from you can offer valuable insights. If they didn’t buy because the product was only one size or if the service you offered was too expensive, then you can adapt and improve your approach.
Anticipate legal issues
Recently someone bought and registered domain names of major companies and then proceeded to contact them to offer the domain name for sale. He was hoping to make some big bucks, but he was not aware of intellectual property law when he did. The companies sued and he got in trouble.
Make sure you check out the legality of what you plan to do as a business, such as making sure you have a license when you need one or get legal advice on an agreement.
For legal issues and concerns, seek an attorney (websites such as FindLaw and AttorneyFind and can help. If your issue is something simple, such as whether you need a license or a permit, contact the Secretary of State in your state (the Small Business Administration can also help you find the government offices that issue licenses and permits in you state).