Started a new business and wanting to avoid a few classic business mistakes? Well, I chat with a lot of start-ups and entrepreneurs, and it appears that we all fall at similar hurdles. Here is a quick summary of five mistakes and how to mitigate them.
1. Giving too much away
Been in a situation when you are speaking to a client, being useful to them and then not getting the follow-up work? Same. Probably because you are a willing to share and end up sharing a little too much.
You can give information away in business but be careful not to give too much away, or you could see yourself out of longer-term work. A good way to counteract this is by preparing some giveaway documents that you are happy to share or talk through, but then save the good stuff for the actual agreement. Classic business mistake.
2. Not being clear on the plan
This has caught me short a couple of times. Getting carried away with the passion behind the project and not laying the plan out clearly means you can end up down the road a little off schedule. A good way to prevent this higgledy-piggledy approach is to have standard plans for workload, which can then be amended. A generic template or process with attached timescales for delivery makes it clear for the client and helps you stay on track too!
3. Underquoting and feeling frustrated
They say you should charge the right price or work for free to maintain a good project satisfaction level. When you undercharge or get negotiated down on what feels financially comfortable, the project can begin to cause frustration, particularly if it runs into unforeseen complications. The problem is we undervalue ourselves and overvalue others. Do your market research in terms of pricing and stick to it to avoid long term frustration.
4. Not getting paid upfront
Another business mistake is a clanger and a total pain, particularly if you have an outlaid for the project in time, equipment or resources. A good way to mitigate this is to ask for a percentage from the client upfront or just set a standard deposit fee. This proves that the client CAN pay and sets the expectation that they WILL have to pay. This enables the relationship to become more clearly defined as transactional, and it can avoid muddy waters down the line.
5. Saying yes too much
Yes is a powerful word to open doors and opportunities. However, saying yes too much and landing up with too much work or too many ad hoc projects can be overwhelming and lead you to breakdown or having to renege on the agreement. Two good tools here to avoid such difficulties… Firstly, having a year overview plan displays all activities and lead times, so you know when you will be free and when you will be at capacity. Secondly, a working hours sheet breaks down the hours you can physically work, but more importantly the number of hours you WANT to work, and then breaking down your projects and clients by hours to see what you are committed to. I did this recently and had agreed to 220 working hours per month! Ouch.
I hope these help! I would be fascinated to find out what other mistakes you have made and how you might suggest people overcome these.