Being an entrepreneur for the first time is fun and exciting, but nothing prepares you for the day when you finally realize that things aren’t working out. My partner and I ran a technology business for about two years before we decided to close it. We worked hard, but despite our best efforts we were not able to do it. These are some of the things we’ve done wrong.
I am trying to serve everyone
Our service was to provide business owners with an easy way to sell gift certificates and vouchers online.
My partner created the software with the intention of serving every type of business. However, we soon realized that most of the people interested in our services are from the beauty industry. We should have taken that insight and rebranded our site, our services and our marketing toward that industry. Instead we got stuck thinking of satisfying everyone.
It has cost us dearly. We should only reduce our services and focus only on the beauty industry. The expansion could have come at a later date once we were successful enough in the expansion.
Tip: Start small, focus on a niche market before expanding.
Choosing the wrong business model
It was a big one for us. We couldn’t figure out the right business model for this particular platform. Choices are either a “subscription base model” or “pay for each transaction model”. In the end, we chose to charge customers for each transaction and charged a very small dollar amount for each gift certificate sold.
Unfortunately, this did not work out very well. Since most of our customers owned new businesses, their sales were very low and in most cases not. And since they’re selling something, we’re making money – we’re not making any money.
Poor customer service
Even as a first time business owner I know how important customer service is. I should probably have listed it as number one, because looking back now; I can honestly say that I did a bad job of serving our customers. We were busy focusing on reaching a mass market; We haven’t taken care of those who are already using the platform.
We were gaining and losing customers at the same time. I’m not entirely sure if we lost so many users because of poor customer service, but we certainly didn’t do much to find out why.
Tip: Focus more on the customers you have, even if it’s just a few.
The product is not being updated
Our gift certificate platform was very basic. We have created the least effective product and paid people for it. The problem is we kept it basic the whole time we were in business. We almost never update the software. People were emailing us asking for all sorts of features, but we felt it was good enough for what we wanted to do. Our users felt we weren’t listening and weren’t being taken seriously.
Tip: Your product / service will never be perfect. So keep working on it and don’t be afraid to change.
The company was built from the ground up without any external funding. I know you think it’s good, don’t you? And I agree, but the lack of funding has made it difficult for us to grow our business. We cannot afford the smallest thing; Every penny has to be counted. And because of this we had to do each single task ourselves, while we could hire professionals to help us do what we didn’t know how to do. Not only did we do a bad job of completing those tasks, we also lost the speed of our productivity.
Tip: Hire professionals: stick to what you do well – outsource the rest
Starting a business is always a great idea, but if you are really about to start one, make sure you are doing it for the right reasons. Make sure you’re teaming up with the right person – and be prepared for ups and downs Lastly, make sure that you have been in it for a long time and give it all the focus it needs to succeed.
Herbie Fabius is the founder of the startup interview blog / podcast BilliionSuccess.com and the web design service StartupTab.com. He interviewed successful founders to help educate a community of novice entrepreneurs. You can contact him on Twitter 6 billion successes
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