1. A dip is not necessarily temporary, and a rise is not necessarily a trend.
Everyone who has ever started a business has great expectations. You build a business plan that projects rapid growth and imagine the good life to come. When it comes time to track your progress, however, too many people let optimism take over. You close your first deal and get your first check, and the natural tendency is to think that this is going to be the new normal. And when revenues dip, many people have the reaction that this is just a small setback and the revenues will resume soon.
Of course, the reality can be quite different. Rises and falls may be temporary or they may be long-term trends. You don’t know until more time passes. As a result, I’ve learned not to get too excited or too discouraged by changes in revenues, either up or down.
2. Everything takes twice as long and costs twice as much as you planned.
“No operation extends with any certainty beyond the first encounter with the main body of the enemy.” Helmuth Von Moltke
In other words, your plans go out the window when the first shot is fired. A business plan is a good thing as it helps you layout your assumptions for your business. A good plan will help you determine whether the venture is feasible financially and otherwise. If you can get an expert, experienced help in building the plan, it has a chance of being somewhat accurate.
But the fact is that even the best business plan is speculative fiction and you must be prepared for things to go differently. The money will go out faster than expected while revenues will be slower to arrive. My rule of thumb is to take the amount of capital you expect to need to launch your business, then double that number. And then double it again. In most cases, that may be enough to get you started.
When I started my first business as a computer consultant, we had to refinance our home twice to have the money needed to get us through the startup years.
3. People don’t do business with companies; they do business with people.
It is a rare business that you can just set up and let run on autopilot. In most cases, you need to have personal contact with your prospective customers or clients. You need to establish trust with them. I think that the best way to do this is to be scrupulously honest with them. If you exaggerate or stretch the truth, they may not believe anything you say after that and it will be hard for them to choose to do business with you.
Instead, I try to under-promise and over-deliver so that people feel that they are getting real value in their dealings with me. The end result is a loyal customer base; keep in mind that it’s always easier to make a second sale to an existing customer than it is to find and convince a new customer to buy from you.
4. Don’t build what people need. Build what they want.
This is my favorite mistake. I have made it over and over throughout my career. I’m getting better at it, but I still struggle with this.
I understand that you want to solve a problem for your customers, and that’s good. But your solution may not address the problem that they think that they have. The classic example is an electric drill. The average customer does not want a drill. They want to make holes in things. To do this, they need a drill, but that’s not what they want.
One of my first self-published books was about HDTVs. I explained the different technologies and the advantages and disadvantages of each type. I explained the different specifications for flat screen displays, and I told readers what to look for when selecting a new TV. I sold the book with a no-questions money-back guarantee, and while many readers were very happy with the book, I’ll never forget the first return I got. The customer was apologetic in asking for his money back, and I assured him that I was happy to do it. But I asked him if he would share what was wrong with the book. “There’s too much information in it,” he told me. “All I want to know is which television to buy.” I gave him some specific recommendations and sent him back his money.
So if your customers need broccoli, don’t try to sell them broccoli. Sell them the ice cream that they want instead, and then add some broccoli to it so that you solve their problem.
5. The unfamiliar is scary. Make it familiar and it won’t be scary.
A familiar quote states that “people fear public speaking more than death.” It’s wrong.
This is an inaccurate summary of a study’s results from the 1970s. The study showed that people fear death more than public speaking, but that speaking was indeed a fear shared by many people.
Our brains are hard-wired to fear the unknown as a survival instinct. When we are faced with an unfamiliar situation, we naturally respond with anxiety because we don’t know what will happen. This is true for speaking, but it’s true for other activities as well.
I am also a musician and have performed in public with groups ranging from bluegrass bands to classical music choruses. And I am always a bit anxious the first time I play or sing a new tune. It takes me a while to learn the notes, and then the words. I have to listen to the other musicians to make sure I’m in sync with what they are doing. A lot of different things are all happening at once. So I practice. I rehearse the music over and over, by myself and with the other musicians. And over time, I memorize the music. It becomes familiar to the point that I can relax and feel the flow. I may still be a bit anxious the first time I perform it in public, but usually, that passes quickly and I feel relaxed and natural in my delivery.
I believe that the same is true for public speaking. It’s normal for it to be a bit scary at first, but if you practice it over and over, if you repeat a speech enough that it becomes familiar, you will be less anxious. Just as with a favorite song, you will just know “what comes next” without having to refer to written notes. You will know how long it takes to deliver; you won’t be anxious about running too short or too long. You will know the shape of your talk, which will free you from having to remember the precise words and instead can speak freely about your topic.
The key to transforming the scary parts of life is to do them over and over until they become predictable and familiar. -Alfred Poor