When I started my business, I had no idea what I was doing. I relied on my gut instincts and what I saw my parents do in their businesses, which, by the way, were nothing like the businesses I have owned. Allow me to share these seven mistakes to avoid when starting your business.
What Were My Seven Mistakes?
Well before I go too in-depth with these let me give you a quick overview by listing out the seven mistakes I made when I started.
- My price point was too low (way too low).
- I allowed potential clients to negotiate my rate.
- I allowed clients to dictate everything too often (making me like an employee again).
- I didn’t take off time for myself or I would work on vacation.
- I did not utilize the right tools when I started my business.
- I did not unplug from online activities.
- I was not myself.
How would I change this if I started a business today? Let me share the ways I would address these seven mistakes and turn them into processes and rules I would follow today.
Avoid Pricing Too Low
As I started in business, basically by accident (read more about that here), I did not know anything about how to price my services. I only knew what I made years prior in the corporate world. Pricing your services online as a virtual professional is very different than receiving an hourly or even salary wage in the corporate world. So, I priced my services much too low.
How To Avoid This Mistake
When pricing your services online you have to consider your overhead including the rent/mortgage (you can deduct* part of this when working from home), heating and cooling, equipment, and more. You should also take into account any office supplies you will need throughout the year. Let’s not forget business insurance as E & O (Errors & Omissions) is a must. Finally, you should consider the money you will draw from the business for your services and the money you will pay someone else, whether an employee or subcontractor.
I finally increased my fees when I had two different business coaches in our industry come to me (separately) and ask me to raise my rates (yes, true story)! They said that offering services at such a low rate affected the entire industry and brought everyone’s value down. They encouraged me to price my value. I had to wrap my mindset around that and I had to believe my worth. It took approximately six months until I finally changed my rates.
Do Not Negotiate Your Rate
Along a similar topic but not quite the same as negotiating with prospective clients over your rate. I made this mistake, early on. I received many ‘tire kicker’ (as we called them) calls just to get my rate. After hearing my rate they often attempted to negotiate saying they could not afford that price. Honestly, if they couldn’t afford it I should have ended the call but I really didn’t know better and just wanted to help others, not to mention that I needed to earn money.
Unfortunately, I allowed a few of my prospective clients to negotiate their rates. Like I did, you may have also and it’s easy to fall into this behavior. You want or even need to earn the money so you’re willing to take a lower price point than you should. The fact, however, is that when a prospective client does this it means that they do not value you or your work. They probably will not value your time either.
How To Avoid This Mistake
Remember clients are not hiring you as an employee. This also means they are not paying you for benefits like health insurance, vacation, sick days, and more. You have to account for these missing benefits within your rate calculations. I discovered a great way to do this with a tool from Hubspot called Freelance Hourly Rate Calculator.
Do Not Allow Clients To Dictate It All
Another mistake I made when I first started was that allowed some clients to dictate work to me. I allowed them to call any time and expect me to pick up. Not only that, but it also meant stopping whatever I was already working on to begin completing their new task (that may have also been needed immediately). I also permitted them to tell me how my work should be done.
This should be avoided as it may cause the IRS to view you as an employee rather than an independent contractor (or freelancer).
If you are deemed an employee by the IRS and not a contractor the client would be responsible for taxes on your behalf as well as for your benefits. So, it is for their benefit as well as yours that you keep the relationship in the right perspective.
How To Avoid This Mistake
Never allow clients to dictate the flow of your work. Do not allow clients to tell you how to complete the tasks they need. You should already know how to perform the task. You may need to learn a new software they use but you should know how to do the work already.
Example
For example, let’s say you are an email marketer. You have a new client who uses a system called Moosend (the one I use but not many have heard of it). As an email marketer, you understand how email marketing works, and you know that most systems (or programs) are similar. You may not know Moosend but you do feel confident that you should be able to work within the system. You also know that if you get stuck you can watch a video to help.
Take Time Off For Yourself And Your Family
I was terrible at taking time off when I first began my business. After working all week I often worked the weekends too. so, I was not very good at taking time off even when we went on vacations. I took my laptop everywhere we went.
It is not easy to overcome this but it can and should be done. You cannot get the days past back but you can protect your future.
How To Avoid This Mistake
You have to set boundaries for yourself when you own a business otherwise it will consume you. Setting boundaries on the weekend is where I began. I did not work on any client work on Saturday or Sunday.
I had a client who notoriously messaged me late at night and on weekends. I’m sure he didn’t mean anything by it and it was probably his only time when he was thinking about projects to send my way. I should have waited to answer the messages but I had a hard time putting it off until the next day or work day. It was something I had to work really hard at doing. It was not overnight but eventually, I was able to ignore the message until the next work day. Take the small victories as you work toward your larger boundary goals.
Another Rule I Made To Myself
Another rule I decided to implement was that I would no longer answer my business phone unless I was expecting a call. I have not allowed calls to interrupt my work for several years now. It is a very free feeling, my friend, believe me. If it is a client, they will leave a message; otherwise, it is most likely a sales call. I can call them back after I finish the task I’m doing. I do not have clients who expect immediate answers, I am not in the corporate world anymore where a boss picks up the phone and expects you to answer back immediately. Remember you are the business owner – this gives you freedom to create the boundaries and rules you decide on.
Utilize The Right Tools For The Task
Utilizing the right tools for the task in your business is essential. The only software I started with was Microsoft (Word, Excel, PPT) and social media. I had no idea how to manage my business or set up processes and systems. As my business grew keeping track of all the work clients were sending me became increasingly difficult. I knew I had to change some of the ways I was doing business.
So, I became familiar with project management (pm) systems. I thought one of these would be the answer to managing all the projects and tasks I was responsible for at that time. What I found instead however was that not all project management systems were created the same. People find it difficult to believe but it literally took me a year to find a system that I liked and worked for me.
“When looking for a project management system you have to find one that will work like you work otherwise it will not work for you. “
How To Avoid This Mistake
The best ways to avoid this mistake is to start out using the right systems from the beginning. Learn a pm system that will work like you work. If you like boards and it’s about visuals then use something like Trello. If you like lists and following the flow of it all perhaps Asana will work for you. Wrike was a perfect fit for me. I could see it as a board (if I wanted visual) but I could also list it by the client, and by project. I could also share the project with my team but did not have to share the entire client work being done. One other way I could view the project in Wrike was as a daily to-do list. It also allows you the ability to add 5 users and multiple collaborators.
Make It A Rule To Unplug
Similar to not taking time, making sure I unplugged was a difficult rule I set for myself. If I used my cell phone and a client email came through I’d automatically click on it and begin to get in that work mode again. It also allowed me to break my own boundaries and answer client text messages as they came in. I knew I needed to keep this a clear boundary for myself and my family.
How To Avoid This Mistake
The best way I learned to unplug was either to put my phone up as in charging it or put it out of view. If I couldn’t do that I could create settings that didn’t interrupt me. I set it up so that I didn’t get push notifications for certain items like emails and social media pushes in my settings. This worked really well for me so that I could play a game on my phone and still text my kids.
Be Yourself
Being yourself seems an easy statement however when you’ve grown up with a proverbial pink elephant in the room that you weren’t allowed to discuss you become very good at masking yourself. How could I be real and authentic with everyone online when I couldn’t do that my entire childhood? I was still learning what it meant to be the real me with myself. Instead, I often acted as I thought the other person (or client) wanted me to act.
“How could I be real and authentic with everyone online when I couldn’t do that my entire childhood? I was still learning what it meant to me real with myself. “
How To Avoid This Mistake
For this one, I had to take baby steps. I think I am still taking them honestly but I am getting better at it. Between webinars, workshops, (not to mention counseling over the years). and my own VA who is great at helping me be myself on social media I have come a long way
More than likely you’ve not had a childhood trauma that makes you hide yourself but you may value privacy and don’t want to share yourself with the online world. I get it, I really do. I will remind you, however, that it takes so many more touchpoints today for prospective clients to know, like, and trust you. As a virtual provider, it is also important that you market yourself. Unless you have strategic and referral partnerships that you allow to connect with clients behind the scenes (and if you do – that is awesome so disregard this point), you will have to be seen to attract clients.
Take baby steps as you step out into the entrepreneurial world. Allow others to get to know you the real you. Your true audience will love the real you – they really will. So take a step in that direction today. I’ve learned the more you do, the more others embrace you. I’m not just talking about sharing your food (please no!), but sharing parts of your life, who you are, and how you can help your clients. Share a little about why you want to help them. It goes a long way in connecting you with your audience.
Final Thoughts
It is my hope that you haven’t already made these mistakes and that this article helps you as you start your business. If you’ve made some of these mistakes don’t worry, mistakes are a part of the journey. They help us to think deeper and find solutions to do it better.
If I can help you in any way, I’m here for you, my friend. Reach out and let’s chat!
Until Next Time – Keep Up Your Success!
Ways I Can Help You…
- Are you ready to start your business and build an agency?
- Are you already in business but are at a place where you want to create that agency?
- Are you hitting a revenue wall and not sure why – you are ready to keep growing but not sure why that agency seems just out of reach.
Set up a FREE Mini Coaching Session with me and see how I can help you build that 6 figure agency you desire to create!
*You should always check with your Accountant or Financial Advisor regarding business finances.