MBA2345 5 Mistakes to Avoid When Starting a Business in 2023 + Free Ride Friday

0:00This episode of the$100 MBA show is brought to you by This is Small Business Next Generation, a new docu-series from Amazon. I've listened to an episode of This is Small Business Next Generation, and it's pretty exciting. I'll tell you a little bit later about episode two where they unveil the contenders for the Rice Business Plan Competition, where you can learn what makes a great business plan. This is Small Business Next Generation is out now. Go listen wherever you get your podcasts.

0:35Heyo! Welcome to the$100 MBA show. No fluff, just the good stuff with our practical business lessons. I'm your host, your coach, your teacher, Omar Zinhome. I'm also the co-founder of Webinar Ninja, an independent software company I started back in 2014. And today's episode is Free Ride Friday. On Free Ride Fridays, we give away a lifetime membership to our$100 MBA program. Our six-part course on how to become a better entrepreneur, 100 % guaranteed. If you want to win a free ride, just leave us an Apple podcast rating and review and you enter our weekly random draw we call Free Ride Friday. Listen in on Friday just like today to see if you won.

1:11It's that easy. In today's episode, you'll learn the five mistakes to avoid when starting a business in 2023. How you start your business actually has a great effect on what you're going to experience as you're growing your business. The first steps you take will actually make a difference. The things you do, the decisions you make will impact your ability to become successful and how successful you can become as you're growing your business. This is why it's so critical to do the right things. And in 2023, it's easier than ever to start a business, but it's also the easiest time to make some big mistakes that can impact your business forever.

1:50So let's avoid these mistakes that I'll share with you today like the plague. Let's get into it. Let's get down to business. five mistakes to avoid when you're starting your business in 2023. Let's kick off with mistake number one. We got a lot to cover, and this one's a biggie. I see this mistake done over and over again, and here it is, not getting started. Let me explain. A lot of people think getting started means planning, writing down notes, research, talking about their business idea, maybe even pitching it to people. This is not what I mean by getting started. This is often called playing business.

2:29You're subconsciously procrastinating. You can't fail if there's nothing out there to fail at. So to protect ourselves, we don't really actually get started. We just incubate this idea in our head and with our friends and with our family for weeks, months, even years. Getting started means actually putting something out there in the world to see if it sticks. Let me give you an example. When I started my company, Webinar Ninja, my software company back in 2014, I could have just thought about it and planned it and done a lot of research for years and never put it out there in the world. That's not starting.

3:06What starting looked like for me was, yes, a bit of research, understanding what the market needs, but building something small, an MVP, something that really is not going to take a lot of time, a few days, a week, and just trying it myself and using it for my own webinars. It wasn't fabulous. It wasn't sexy. It wasn't amazing UX or UI, but I needed to get started. I needed to see what life is like with this thing in the world. So I just started using something very basic to run my webinars. And then my audience on the webinars asked me, what are you using for this webinar? Looks pretty cool. This allowed me then to be able to find out what people want, what they need, with a real tangible product, a real thing out in the world.

3:53Talk is cheap. When you tell people something, when you show them even like a slideshow, you're either going to get a blanket, yeah, that's a good idea, or they're not going to have enough information to know if they really would be a customer. People need to see, feel, and understand what your product is. So get us started with an MVP, a minimal viable product, something out there. Another example of a minimal viable product is, say, for example, you want to create a huge annual event around your niche, around your area of expertise. It's going to be a national conference and it's going to take over your market.

4:26But an MVP version, a minimal viable product of that would be hosting a dinner with the top five or ten people in that niche in your local area. Yes, it's not the big conference. Yes, it's not the big dream in your head, but you need a minimal viable product to get started with to see if people are interested. If the people that love your niche, love your topic, love your area of expertise and are the best at it, if they're not interested in getting together for dinner, they're not going to get together and get on stages and spend three, four days at your conference. So not getting started is mistake number one.

5:01And when I say getting started, I mean a real thing in the real world in front of potential customers. Number two, not validating your idea. So many people look at other influencers, look at other businesses, look at other people on Twitter and Instagram and YouTube and say, oh, I could be like that. I can do that. And you fall in love with the idea of who you'll become. You fall in love with the idea of your business and you never get around to actually find out, are people willing to pay money for this thing? This is why the MVP getting started goes hand in hand with this one. You got to validate your business idea.

5:36And validation actually means people parting with their money if your product is for sale. So back to Webinar Ninja. when I got started, I pre-sold Webinar Ninja, and I asked people to put down$250 as a deposit if they wanted to buy this software when it comes out in four months. I knew if people are not willing to part with their money, they're not really going to be interested. A waiting list, an email list, it's easy to say yes to that, but I need to make sure that they're actually willing to spend money on this idea, on this product. If I don't validate that, then it just means people like to say yes to me.

6:12It doesn't mean they like to buy from me. People have to part with their money. So for example, you're starting a graphic t-shirt business. You have some artistic talent and you create some really cool graphic tees. You're going to have an MVP store with some mock-up rendered images of your t-shirts and you physically go to people that you think that actually want these t-shirts. They would love it. You show it to them. Hey, would you like this t-shirt? Yeah, this sounds great. This looks great. What's your size? Are you willing to PayPal me? Send me 20 bucks for the t-shirt or 50 bucks or whatever it is.

6:44If they say no, it's not valid. You got to find customers that actually say yes. Once you get a few yeses, you know that people are willing to pay. Now you know who's paying for your t-shirts. They have an avatar now. You can say, okay, these are the people that said yes. What are these people like? Let me go after these types of people with this description, with this demographic, because these are the people that are interested and my t-shirts. That's what idea validation looks like, parting with money. This episode of The$100 MBA Show is brought to you by This Is Small Business Next Generation, a new docu-series from Amazon.

7:17In episode two, hosts Andrea Marquez and Mitch Gilbert break down the various stages of the Rice Business Plan competition. They explain how the competition will unfold, what the judges are looking for, and they unveil the contestants. It's a really exciting show, sharing the stories of striving entrepreneurs trying to win the big prize. I mean, they're competing to win up to$3 million in prize money by pitching their idea in front of the world's leading venture capitalists and investors. This is Small Business Next Generation is out now. Go listen wherever you get your podcasts. Mistake number three, not P &Ling from day one.

7:58What do I mean by P &Ling? Well, a P &L is a profit and loss sheet in accounting. Every business owner should know how to create and read a P &L. It's pretty simple. It's basically all your expenses, all your profit. And you can easily create one on an Excel sheet, a Google sheet, whatever. You should be P &Ling from the moment you get started. Even if you have minimal expenses or no profit, it doesn't matter. You got to get in the habit of tracking the numbers from the moment you get started. Why? Because you want to get in the habit of always being profitable, always making more than you're spending.

8:38Now, I know this could be challenging at the start, especially because some businesses have some upfront costs they have to spend before they can make some money. But it's good to see it in black and white so that you could understand, okay, I spent$15 ,000 already on this business. I need to start making money. I'm not profitable. I need to start making some sales. And until I make some sales, I can't spend any more money. This allows you to keep your business alive by knowing your numbers, by having a profit and loss sheet and being very, very vigilant from day one. Hey, I bought a domain name.

9:13It cost me 20 bucks. Put it in your P &L. I spent$15 on stationery. Put it in the P &L. I'm serious. You got to get used to tracking your numbers. So you're always focusing on being profitable. You got your eye on the prize. You made a couple of sales. Put those couple of sales in the P &L and have a simple formula at the bottom of the sheet that tells you if you're profitable, right? Total of your expenses subtracted from your profits. Very easy, right? But you got to be in the habit of doing it because without money, without profits, you have no oxygen. You can't keep going. And this is how most businesses die.

9:50And it's because they just keep spending and they don't actually P &L their business from day one. Mistake number four, not growing your audience. Without an audience, you have no potential customers. You have nobody to talk to, nobody to sell to, nobody to buy your products. This is why audience building is just as important as building your product. So many people focus on the product, the experience for the customer, and that's great. I want a great product too. Everybody wants a great product, but if you have a great product and you have nobody to show it to, you just have expenses, right?

10:25You just have a personal pet project. This is why it's so important to grow your audience while you're growing your product or building your product. This means growing your email list on your website with an email capture form. This means driving traffic to your website so that you can grow that email list. This means creating great content with your content marketing strategy. We talked about that last week. Check out that episode. Grow their audience while they're building their business or creating their product is what's called building in public. It's very, very popular on Twitter where people just share the journey of building their business online.

11:01So they say, hey, I just launched this product. I just started building out my email list. I made my first sale. I'm making$1 ,000 in monthly revenue now. And they keep sharing it along the way. That sharing of the journey, that documenting of the journey is a sense of audience building. People start really falling in love with your story and your business and your why. And it's just really brand awareness. So don't forget your audience building is just as important as your product build. Mistake number five, no sales process. I find this mind boggling. How many businesses in 2023 do not have any way to sell their product?

11:38I ask, hey, what's your sales process saying right now? How do people buy? Oh, they just find us and they buy. No, that's not a sales process. Even if you're a software or your product, a digital product that people could just buy on your website, there's got to be a process where you walk them by the hand and you convince them your product is the right fit for them and they buy. You have to sell them in some way. Back in the day when people sell things, it was in person. They walk into their shop and they ask some questions and they say, hey, what are you looking for? How can I help you? They show them a few products they might be interested in.

12:12They show them the benefits. They tell them what they can get out of this product. The customer makes a decision. They tell them if they need anything, they can go back to the store. There is a conversation here. By the way, nothing has changed. The people that do business right do this online as well. So if somebody is going to come to your website and buy your digital product, your software, your coaching, your courses, whatever it might be, they have to go through a similar process. So they might go to your website and sign up for your newsletter. And then once you're on your newsletter, you might want to nurture them in your newsletter.

12:42This is part of the sales process, talking about what you do, your story, why you built your product, why they would be interested in your product. You might ask them to reply to the email, ask some questions or what they're struggling with. Throughout that nurturing sequence, you might invite them to a webinar where they join you live and they can ask you questions and you can give them a demo. You can then sell them and maybe an entry level product, a low cost product where they can power their money a little bit and earn trust with you from there. And they consume that product, they get a win.

13:10They then, guess what? Want to solve other problems, want other products from you. And that's another sales process. You got to have a sales process. You can't just say, I put up my website. I put it for sale. People are just going to buy. No, if you build it, they will come is for Hollywood. It's not for business. Some businesses, sales process is getting on sales calls. Some sales processes are flying out and meeting the client in person. So you got to have a sales process to ensure, hey, this is the path my customer has to go through so I can make a sale. You got to know how to predictably make sales over and over again.

13:44It has to be a system. Otherwise, you're just hoping your business is going to get better and you have no plan in place. You're just hoping your business is going to make money. And remember, because we're P &Ling, we need sales to be profitable. And you got to know, when I do this, I make a sale. What are the steps for your business to make a sale? There you have it. Those are the five mistakes to avoid when starting a business in 2023. Let's go over them again. Number one, not getting started with an MVP. Number two, not validating your business idea. Number three, not P &Ling from day one. Number four, not growing your audience while growing your business or building your product or improving your product.

14:22And number five, no sales process. There you have it. But today's episode is not over. It's Free Ride Friday. Let's see who won this week's free ride. The handle is TheWalk11 on Apple Podcasts. The Walk 11 says, loving the podcast five stars. Just stumbled upon this podcast. Just listened to a few episodes and I already love it. Great information. Excited to follow along. Thanks to The Walk 11 for your amazing review. Your mission is to email me over at omar at 100mba.net so I can hook you up with the lifetime membership to the$100 MBA program, our six-part program on showing you how to become a better entrepreneur, 100 % guaranteed, over at 100mba.net.

15:01If you want to win a free ride, just leave us an Apple podcast rating and review and enter our weekly random draw. Listen in on Friday, just like right now, to see if you won. It's that easy. Before I go, I want to leave you with this. All five of those mistakes you need to avoid when you're starting a business, they're hard work. It's hard work at the start. It's not easy. But once you get a little bit of traction, once you get over these things and start building your business, it gets easier and easier. It's the hardest at the start. Once you get over that hump, you'll be just fine. It's equivalent to like sledding down a hill.

15:33Sometimes you got to push a little bit to just get a little momentum. And then once you get it going down, it's smooth sailing. Of course, you'll have other challenges along the way, but those are good challenges to have. Those are problems we all wish to have as entrepreneurs because it means we're growing. Thanks so much for listening, and I'll see you on Monday's episode. I'll see you then. Take care.

15:59Thank you.