As an entrepreneur, especially if you're just starting out, knowing what to prioritize and what aspects of your business you can push back can be quite a challenge. Focusing too much on sales, to the detriment of product development or team building, is just as dangerous for a new business as putting too much weight on your internal workings without making sure you have constant cash flow to guarantee you'll be able to keep the company running.
These six entrepreneurs share some of the business aspects that new owners tend to put too much weight on and explain why prioritizing other aspects at the beginning of your entrepreneurial journey is the wiser decision if you want to build a successful startup.
Although it seems counterintuitive, focusing on sales first and foremost is a bad idea for a new entrepreneur, thinks Calendar founder John Rampton: "It's understandable to feel the need to start making sales. I remember that pressure, especially with investors that wanted their return waiting in the wings."
The best course of action, according to Rampton, is to first build a solid structure and team and then the sales will follow. "It's really true that the details count and set the business up for long-term success," he added.
Similarly, focusing too much on paid ads to boost revenue is not a smart business strategy when you're just starting out. "Many new business owners think that they can take their brand new company on social media and land millions of sales with paid advertising," says MemberPress CEO Blair Williams.
The truth is, you need to focus more on building an authentic customer base, Williams explains. "We thought that social media paid ads could benefit our business, and we soon realized that we needed more sales data so we could target people that can benefit from our product."
"The one mistake that I see new entrepreneurs make over and over again is only focusing on social media vanity metrics," adds Kristin Kimberly Marquet, founder and creative director of Fem Founder, in the context of companies' efforts to build a strong social presence.
"So many entrepreneurs seem to care more about the number of followers they have on Instagram, Twitter and Facebook rather than paying attention to other important metrics such as click-through rates, post engagements, email sign-ups, etc." Marquet explains.
Another time and money trap for new entrepreneurs is investing significant resources in the latest and most advanced software at a point in the life of their organization when that software may not even be needed. "It can be difficult to tell how much software is needed for your business and exactly what your employees will need, which is why you should refrain from overspending in this area," Jared Atchison, co-founder of WPForms, advises.
Atchison believes new entrepreneurs should instead stick to the basics and go with what they are sure they will use instead of buying every kind of software someone else recommends, as that can lead to thousands of dollars in losses. "I'm guilty of overspending on software I didn't need and regretted it," he adds.
Standard Operating Procedures
Some entrepreneurs obsess about the inner workings of their organization and documenting all processes, to the detriment of product development or building a strong team. "Anyone who's read a business book will have heard the hype around documenting everything and standard operating processes. Naturally, that's what I did when starting my first business," Karl Kangur, founder and CEO of Above House, explains.
While Kangur agrees that having such standard operating procedures is very useful, most businesses don't need them when they are just starting out. "Although they were useful, they didn't help until I had built up a team of 15 people. Figuring out product market fit, understanding your first customers and training your team need a lot more attention and focus," he says.
Travel and Events
"We're so obsessed with cool company culture that we end up spending on things that don't benefit it in any way and thus don't bring in any revenue," MonsterInsights co-founder Chris Christoff says, summing up the biggest issue new business owners face when they don't know how and what to prioritize.
"If your business is established, it makes sense to organize a work trip. If not, don't go all out on something that won't bring you results," Christoff underlines. "I used to work for a startup that did this and it wasn't able to recover."