There’s always things we wish we knew before getting started with something. Here are 7 crucial things Sarah wishes she had known before starting her first business.
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When it comes to business, there’s always decisions we have made in our journey…
…that can haunt us in the future.
It could be choosing the wrong niche. It could be driving the wrong traffic. It could even be miscalculating profits. Whatever it is, if we had known better then we probably wouldn’t have made that mistake.
Sadly, that’s not how life works. But the great thing is that you can learn from other people’s mistakes. And you can avoid these same mistakes so that you can succeed faster.
Whether you own a business, or looking to start one, here are 7 things that Sarah wishes she had known before starting a business.
#1: Have realistic expectations about what you can achieve.
Being optimistic as an entrepreneur is great.
In fact, this is a key trait of those who succeed in business.
However, while aiming high is great, a lot of people tend to overestimate their true abilities.
Sure, it may be possible to earn 1 million in your first month in business. But as a beginner, this is not a realistic figure.
And rather than it being a motivating goal, it’s now one that places unnecessary pressure on you.
Why do people set far-fetched goals?
Well for one, in their eyes it may not actually seem so over-the-top. All you have to do is go to YouTube and you can regularly find videos of someone claiming to earn $XXXXXX in 30 days. Viewers can get excited by this to the point where it almost seems like a reality.
But, these videos are far from realistic. Not only that, but studies show that most businesses actually take 6 months or more to reach a profit.
Rather than creating a massive goal out of your reach, it’s wiser to be realistic with your expectations.
Don’t start with a goal of earning six-figures in one year. Start with a smaller one like earning $1,000 a month. Then once you achieve this goal, set a higher one.
Goals don’t always have to be outcome oriented too. You can also set ‘progress’ goals, like setting up your online store or creating your first t-shirt design.
Goals should be both challenging and fun. Make sure your goals meet these requirements.
#2: Prioritize product and store quality over making sales
A lot of people think that marketing is the most important aspect of a business.
Marketing sure is a biggy in any organisation. However, it becomes a problem when this is your sole focus.
The most important aspect of any business whatsoever is your customers.
Your main goal, for everything you do, should be to make sure your customers are happy.
That means focusing on the buyer journey – from the moment they see your ad, all the way adding your product to cart.
This is why a big focus in business models like print-on-demand or dropshipping is maintaining the quality of your website.
Essentially, your website is your “store front.” And from the minute someone lands on your website, they will be judging every little thing about your business.
Why? Because before they buy from you, they first need to trust you. They need to trust that they won’t get scammed out of their money. Trust is critical for them to take the next step with you (spend money).
Again, one great way to easily gain trust is by ensuring your website is top-notch.
Price your items correctly. Use trust emblems. Use live chat. Make sure your policies are accurate. Make sure images are in HD.
There’s so much you can do to win your customers trust without saying a word!
Instead of being focused on sales, focus on serving customers. And always remember that people are genuine human beings, like you and me.
#3: Calculate how much you need to price products to make a profit after expenses.
This is another big mistake.
A lot of people, especially beginners, find they are left with pennies after they deduct expenses from their sale.
And the reason why is because they don’t take the time to properly map out their pricing correctly.
You see, in business, you need to earn a good profit to maintain your business. And this is where pricing comes in. Because the amount you earn ultimately depends on how you price your products.
You can only deduct your expenses to an extent. But with pricing, you can be more experimental with things. You can double the price, or even triple it (as we teach inside of our course).
This leaves a LOT more room for profits.
#4: Pricing is subjective. Higher prices often beat lower prices!
A lot of people believe that lowering your price attracts more customers and sales. But this is a myth. Instead, the opposite is true: High prices often attract more customers.
A lot of people, especially beginners, find they are left with pennies after they deduct expenses from their sale.
It’s common for people to believe that low prices = more sales. However, low pricing may be the very reason that you aren’t making the sales you want.
Why? Not everyone opts for the cheaper price. When you compare two similar items, and one is significantly pricier, studies show a large portion of buyers opt for the more expensive item.
“If it’s priced this high, then there must be something special about it” is the dialogue in your consumer’s mind. People value quality as well price, and so won’t mind paying extra to avoid a regretted purchase decision.
With this in mind, don’t be afraid to bump up your prices. This will reward you with a bigger profit per sale, so you can reinvest in your business to grow it even faster.
#5: You can usually find answers to things you don’t know with simple research.
A lot of people feel stuck when they don’t know or understand something. Hello! Don’t you know there is Google?
The truth is, with a little bit of independent research, you can find the answer to almost anything nowadays.
It may feel comforting to hear an answer from someone you trust. But if you live your life depending on someone’s word to move forward, you’ll soon find yourself procrastinating over things you really shouldn’t be.
Let Google be your friend. Make it a habit to be resourceful in your business instead of waiting on people’s answers. As well as Google, you can also post in forums or attend live Q/As.
You’ll be shocked at how much information you can find if you simply ask.
#6: Have realistic expectations with profit margins.
Another thing many beginners have unrealistic expectations about is their profit margins.
They believe that a tiny margin is 20%. But for most industries, 20% is VERY GOOD, with 10% being the average.
What’s great about online business models like print-on-demand or dropshipping is that the profit margins are usually much higher. Because you source products straight from the manufacturer, each sale you make can earn you 20% or more back in profit.
So don’t beat yourself up if you find your profit margins are less than 30%. Rethink your expectations, and simply aim to keep within a healthy profit margin.
#7: It’s better to earn less passive income than more active income.
Nowadays, people start an online business so that they can buy back their time. Time they can put towards the greater things in life, like travelling or spending time with loved ones.
At the same time, some people get obsessed with profits. They’re frugal with expenses, and will do anything to retain a high profit margin.
They package their own orders, so they don’t have to spend money on a fulfilment centre.
They do all the shipping and handling, so they don’t need to spend money on a courier.
But in exchange for that extra profit, they lose hours of the day to repetitive, boring fulfilment.
Rather than enjoying their profits, they’re enslaved to their own business.
For most us, this would be like a 9 to 5 job over again. But that’s not what most of us are in business for. We’re in business to buy back their time.
The great thing is, there are countless apps and tools out there that we can leverage to save time. And, essentially, allow our business to run by itself.
For example, Printful is a production company that prints your t-shirts on demand. Then, packages it up and ships it to your customer. All on your behalf.
They even have a Shopify app that integrates with your online store. Whenever someone purchases a t-shirt, Printiful’s production team is notified to fulfil your order.
This alone saves you hours, or even days, of doing this by yourself.
Now, you do have to spend money for a service like this.
But now you get to use that time saved for other things. Whether it’s to grow other parts of your business, or indulge in your own leisure time.
With this in mind, it’s important to think about what’s truly important in your business. Clinging onto as much profit possible, or actually enjoying it?
The Bottom Line
Running a successful business is hard work. But there are lessons you can learn here that can make the process A LOT smoother (and fun!)
Whether it’s having a more realistic outcome in business, or focusing on your customers (instead of marketing), or even calculating your profit margins correctly..
…There’s a number of lessons that you can learn and apply to WIN in the game of business.
