Startup founders often make decisions based on unpredictable factors, but there are a few things you can (and should) be able to avoid. Here are 3 areas not to put too much emphasis on in your brand-new business:
Acquiring New Clients
When I was starting out as an entrepreneur, I was only concerned about one thing: acquiring more customers. I thought I understood the logic: more customers equals more work, which equals more money, which then equals more happiness.
However, I soon found out things don’t work this way. I don’t deny the benefits of having an abundance of business, but I discovered that focusing exclusively on sales is a recipe for disaster: the more I focused on acquiring new clients, the less I focused on my existing clients. I noticed a downward spiral of putting out fires with existing clients while trying to appear like a well-oiled machine to prospective clients.
In order to succeed in business, you must focus on your entire business, not just parts of it. Focus on acquiring more clients when you are ready; don’t jump the gun.
Relying on Entrepreneurial Emotions
I also discovered early on that I would make bad business decisions based entirely off of emotions. I spent money on advertising just to feel accomplished, kept unproductive employees because I felt sorry for them, purchased equipment I didn’t really need, and paid for services because I thought I might use them one day.
To be successful, an entrepreneur needs to make logical decisions, not emotional ones, especially when it comes to money. Before you do so, you should think of what it will do for your business or life and if it is worth the investment.
Using the Fearful Pricing Strategy
When I started my business, I undercharged for my service. I didn’t have the confidence to ask for a decent price, and I thought I had to have the lowest price in order to get business.
What did these practices get me? Low profits and poor cash flow.
In order to survive as a startup—both financially and mentally—it’s crucial that you make sure you’re receiving maximum reward for your maxed out efforts. If you don’t see the true value in your business, how do you expect your clients to do so? Your work is worth it; adjust your prices accordingly.
Brad Kendall is a serial technology entrepreneur from Winnipeg, Manitoba with an obsession for entrepreneurship. He is the co-founder of multiple companies including CCR Technology Group, Enlite Digital Advertising Solutions and Digihedron.
The Young Entrepreneur Council (YEC) is an invite-only nonprofit organization comprised of the world’s most promising young entrepreneurs. The YEC leads #FixYoungAmerica, a solutions-based movement that aims to end youth unemployment and put young Americans back to work.