Of the 27 million small businesses in the United States reported by the U.S. Census (and that number only includes those with a tax ID number, not the millions of other “side businesses”), we at Infusionsoft found about 24 million are stage one businesses, or solopreneurs as I call them. In a stage one business, the solopreneur is in a fight for survival. Even if the entrepreneur has a comfortable savings to provide the necessary startup capital and security blanket (which most don’t), she’s in a race against time to generate enough income to support herself.
In this fight for survival, I’ve identified seven big mistakes solopreneurs make that hold them back, or more commonly, cause them to go out of business.
The seven deadly sins of solopreneurs:
1. Not spending enough time on income-producing activities. There are so many administrative tasks, so many indirect, tangential activities that may, hopefully, lead to income at some point, but there’s not nearly enough time spent selling the product or service.
2. Failure to establish your unique selling proposition (USP). What do you do, what benefit does it deliver, for whom, and why should the customer do business with you and not a competitor? Until the solopreneur gets clear on that, they might as well hold up a sign that says, “Will work for money.”
3. Related to the USP is a failure to clearly identify your target market. Until you know who your ideal customer is, you can’t really craft an effective unique selling proposition. The solopreneurs who establish a successful business know their target customer.
4. An unwillingness to do the hard work. Running a business is way more work than having a job—for at least the first three years of business, usually longer and sometimes forever. Most people don’t realize that. They think they’re going to make more money per hour in their business. When they realize it takes a few years of making peanuts, they quit.
5. Insufficient tenacity and mental toughness. Everyone will tell the solopreneur she’s crazy. Even well-intentioned family members, who are afraid or your failure (or afraid of your success), will shower seeds of doubt upon you. Most solopreneurs crack under the pressure and fold up shop.
6. Too shy to ask for the cash. Solopreneurs who don’t charge enough or don’t collect from their customers go out of business. Simple as that.
7. Non-committal. Is this a hobby, a job, or a business? Solopreneurs are frequently treating the business like a job. That treatment will usually result in you getting fired from your (solopreneur) job.
SBS Idea of the Day: Do the hard work to write down and clarify your USP. This will be invaluable to you as YOU get clear on your value to the market.
Read the other posts in Clate's Seven Deadly Sins series: