Opinions expressed by Entrepreneur the collaborators are his.
One of the biggest misconceptions about entrepreneurship is that once you’ve figured out the sales code, you’ve created an invincible money printing machine. A lesser known truth is that some imminent dangers can doom even an initially successful business to failure, and you may not see them coming until it’s too late. Here are seven dangers to keep in mind so you can keep your business away from the deadly pitfalls ahead.
1. Don’t predict that your well might dry out
If you are one of those lucky founders with direct access to the right target market for the product or service you are marketing and you start accumulating word of mouth sales through friends and family without spending a dime, you could be susceptible to a drought. unexpected. While free organic marketing is great, it rarely lasts forever and can surprise you when the demand for your network dries up, especially if you’re not selling a recurring revenue product.
The solution to mitigating this disruption is to accept that your direct network is not the whole universe; Once saturated, you will need to generate new leads and reach a wider market. Therefore, generating lead and audience growth is one of the least important, but mission-critical, priorities for early-stage founders.
Related: 5 companies that grew too fast (and what can you learn from them)
2. Pursuing advertising without a post-viral conversion plan
If you’ve benefited from the media features that have catapulted your sales, it’s easy to keep chasing more press. However, most stories become old news, and your time may be better spent taking advantage of and reusing these previous media features to increase your conversion rate with your own marketing. Viral press without a post-viral conversion plan is a missed opportunity that puts a clock on the longevity of your media sales.
3. Put too many eggs in this (or any) basket
I have a friend whose business has quickly shot up millions of people using ads on a platform. Industry competitors noticed and also flocked to this platform, throwing all their eggs in the seemingly lucrative basket. Along with the competition, some unscrupulous players arrived, and in a short time, the platform had largely banned ads in this industry, cracking down on even the most benign promotions. That friend had to struggle to try to replace the precarious marketing channel after loading his booming business with recurring high expenses.
If you rely too much on any platform, technology, or person, you accept a huge risk and vulnerability. Before you create a great marketing team around a channel or over-invest in a platform, diversify or prepare for an unannounced carpet.
Related: Lessons from the complacency of marketing that I had to learn the hard way
4. Do not anticipate the changing tides of seasonality
Sometimes you’re a marketing genius, and other times seasonality, current events, timing, or luck can drive a surprise increase in sales. If you have recently launched your business with an overwhelmingly positive reception, you should consider critically and objectively the factors behind your success and whether any of them may have a finite life cycle.
I launched a business during a perfect storm of seasonality, global events, and industry favoritism, which resulted in abnormally accelerated results. At the time, I didn’t realize that going from $ 0 to $ 20,000 to $ 60,000 in a few months with the same marketing strategy isn’t really normal and it probably won’t continue forever. I couldn’t anticipate the sharp decline a change in climate, seasonality, and market favor would have in my business, and my devastating panic almost led me to quit altogether.
Entrepreneurship means overcoming the highs and lows that follow. Drive seasonal or trend-based waves, but critically evaluate what results are attributed to your own actions versus external factors that you can’t reproduce or control.
5. Lack of backups, for everything
Depending on the type of business you run, you may find that backups are not critical to you or your customers. I am here to prove that this toxic fallacy is 100% wrong. Whether you’re selling a physical product, a digital product, a service, or another offering, backups are the only lifeguards you’ll need when you definitely don’t have them.
My company did a great sales promotion to 400,000 potential customers on the same day that our payment system provider crashed. We struggled to create an alternative billing and payment system or risk losing thousands of sales. One of my business was to organize premium digital events the week that a power outage devastated the east coast, where half of our customers resided. Our backups, pre-registrations, and offline versions of our company’s online resources isolated us from tens of thousands of refunds.
From software to content and hardware, you should have backups of everything or be prepared to pay the price.
6. Delegate on educating
The last thing you want is to create a business in which you are the least valuable player. Delegating too fast, too much and as a substitute for educating oneself can encourage this exact phenomenon. Ingenuity is easily the most valuable skill for entrepreneurs, but those who pay for all the problems without digging into it risk being fooled by the same experience that makes entrepreneurs so versatile and valuable.
While delegation can save time and improve your expertly talented business, I suggest that employers try to learn each task before hiring. Otherwise, you may lack the skills or knowledge to intervene and take action when unforeseen emergencies arise and your reference talent is not there.
Related: Should you delegate this? A complete guide
7. Construct in the perpetual equation
You may be the face of your business, but a key weakness that is approaching many founders and individual customer-oriented entrepreneurs is inadvertently being incorporated into the perpetual equation of their business operations. Becoming an irreplaceable part of your operations can limit the scale of the business and even eliminate outflows and changes of ownership of the table. Think long and hard about the strength you want to anchor your individual involvement in your business. If you don’t, start creating systems and roles that a hired team could accomplish while enjoying a beach vacation or immersing yourself in a whole new activity.