Beginner Entrepreneur Mistake – Chasing Money
November 23rd, 2009I’ve been doing my own businesses off and on for almost 5 years now and while I am no where near what I would consider a success (yet), I have learned a lot from my previous failures. There are many common mistakes first time entrepreneurs fall victim to. I see the same pitfalls over and over again. I’ve decided to start a new series of blog posts documenting some of my boneheadedness in hopes that it other new entrepreneurs won’t be as dumb as me.
Mistake #1 – Chasing Money
Why do most people want to become entrepreneurs or have their own business? For most people, the answer is easy; they want to make more money. Sure, they’ll come up with a long list of other reasons to make themselves sound better, I want to be my own boss, I want more free time, I want to be in control of my career, etc all that is fluff to cover the fact that they want to make more money. They want more money so they can have more free time, buy the things they want, do the things they want, basically they think that their current situation, their lack of happiness is the result of not having enough money.
There is nothing wrong with wanted more money, but starting something with the sole purpose to make more money is a broken proposition. This is the idea that drives people to multi-level marketing “opportunities”, opening franchises or buying an existing business. This is why 9 out of every 10 businesses in America fail. Money CAN NOT be the #1 priority for your business.
There is a reason why this is a very common mistake. It is counter intuitive to general thought. Start a business to make money. This was my way of thinking before as well but through experience my view of business is now this,
Start a business to create positive change.
When you do something strictly for the money, you often tend to chase the hot market. For example; Green living and eating organic is very hot and buzz worthy now. To many it may seem like a good idea to get into this market, people are interested in it, so you will probably have customers. Well, the truth is, if you only want to sell things like that because it is hot, you will most likely fail.
1. You will not know enough to sell the products effectively with confidence.
2. You will grow frustrated dealing with a customer base that you cannot relate to.
3. Your customers will not be able to connect to you because you have no passion for the product and you see them as numbers.
4. You will end up hating it because it becomes just another job.
Fortunately for me this mistake only cost me around $1000. In 2007, when the real estate market began to tank, I became very interested in real estate investing. I was growing tired of my job as a web designer and I saw it as a great opportunity to make some big cash. I joined a local investing club in Honolulu, devoured podcasts and internet material on the subject and spent some serious money on education in the field. In the end, I had a couple deals fall through, and made $0 in real estate.
The truth is, the businesses that have the highest chance of success are the ones built on passion. Something that you would do anyway, even if you weren’t paid to do it. This solves all 4 of the problems I stated above.
1. You will know more than anyone trying to compete with you
2 & 3. You will love your customer base as they are the same as you
4. You would do this even if you weren’t paid!
See how it works. Follow passion, don’t chase money. Money is a measuring stick that gauges if you are doing the right things. What is your measuring stick reading?
