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10 Mistakes New Coaches and Entrepreneurs Make When Starting Their Business

My first couple of years as a coach were pretty tough. I only made it through because I’m a natural action-taker and pretty much fearless around rejection. I had no business background, a tiny network, and zero understanding of what the hell I was doing. But somehow I’ve lasted 10 years in this game.

Even so, most of my time was wasted in the first few years. I see that now, and I want to help you avoid the same mistakes I made.

I’ve since worked with a lot of new entrepreneurs, and I see them all making the same critical errors at the start that frustrate them, slow their growth, and often prevent the business from succeeding.

Here are the top mistakes to avoid (and what to do instead).

Failing to validate the business idea

This is probably the main reason that a large percentage of new businesses fail (the other is poor cashflow management). Just because YOU think it’s a good idea doesn’t mean it’s viable as a business.

I recently put together this guide to give you the steps to test and validate your business idea. If you can’t get your idea into action using this guide, then there’s a good chance your idea kinda sucks. I know it’s hard to take, but becoming an entrepreneur means accepting that 80-90% of your ideas are nonsense.

Make sure you pass the test before you commit to registering a business, quitting your day job, building a website, coming up with a business name etc. – all the stuff that’s hard to reverse if you get it wrong.

The test is simple: you should be able to run a free version of your program and fill it with people in such a way as to prove that there is demand, that you have a unique selling point, and that you can be reasonably sure you will be able to create paying clients consistently.

“Build it and they will come” mentality

I have bad news for you: clients are not going to magically come to you simply because you exist. You will have to go and find them yourself.

With the rare exceptions of certain business types that supply necessary survival services (e.g. plumbers), most new businesses will have to build an audience of prospective clients, one person at a time, to get off the ground.

That means hours of reaching out to people, building relationships with them, and making offers. In your early days, this is what you should spend 90% of your time doing. Forget websites, content creation, social media posting – none of that shit will build your business.

Envision yourself at the computer sending messages one at a time, or calling people over and over, or going to events and introducing yourself. That’s how it actually works. Building a business really means building relationships.

Avoiding rejection

You hope some paid ads or Facebook posts will bring in clients who are already a firm YES and will just sign up without you having to do some icky sales stuff. I hate to break it to you – not gonna happen!

You must get used to hearing the words “No thanks” and “Not interested” and even the occasional “I’m blocking you!” if you want to find and create clients.

In the early days, you cannot hire someone else to do your marketing and sales. This approach will only see you scammed out of your cash quickly! Many marketing companies prey on new entrepreneurs who are hoping to avoid rejection.

Put it this way: you can hire someone else once you’ve figured out how to do it yourself and it works to a level where you can teach it to another person.

Hoping content will attract clients

Content – such as articles, videos and podcasts – can play a helpful role, and is indeed one branch of the marketing tree (the others being outreach and ads). But in the early days, creating content and thinking that will be enough is similar to the “build it and they will come” problem.

In the early days content can be used to help build relationships. It’s helpful during a conversation with a potential client to be able to say, “Oh I’ve written a guide for that problem, I’ll send it through”. But content alone is not going to passively grow your business.

To give you a benchmark, it wasn’t until about my 5th year as a coach before people started regularly coming to me from my YouTube videos and blog posts. I published 4 full length books that took a combined 7 years to write and only had one client directly come from them!

Think: focus on content once you’re already sold out!

Being too open about your client type (niche)

A classic entrepreneurial mistake is thinking that anyone could be your client. You’re at the wrong end of the spectrum. A much more productive way to think about it is less than 1% of people are your ideal client.

For you to figure out who that 1% is, you need to get super specific and boldly committed to a niche service or product.

You must solve a very specific problem for a very specific group of people.

“Life coach” attracts no one, while “Nice Guy Recovery Specialist for Fathers” attracts a core group of highly like prospects. Calling yourself a “Personal Trainer” puts you in competition with literally millions of others, while calling yourself a “Mobility Coach for Zouk Dancers” eliminates all competition.

Solve one problem for one person at a time, then grow from there.

Making adjustments on low numbers

I’ve seen so many coaches constantly adjust their reaching out process based on tiny amounts of feedback. So someone will message five people and one of them gets upset about being messaged, so the coach changes their whole approach. Or a masseuse runs an ad for a week and spends $50 on it, gets no leads, and then decides to give up on advertising.

There’s a good chance that you’re having emotional reactions to numbers that are WAY too low!

You need HUNDREDS of attempts to get a decent sample size worth measuring. You need dozens of paid clients before you’ll be able to accurately measure the best activities for finding new clients. And you need these numbers spread over time and situations to get a range of different contexts.

Choose a method, then run a test that gives you at least 100 results. Then you can make some small adjustments. And I do mean small.

So if you’re running a marketing funnel of some kind, after each batch of 100 attempts you’d only make a small adjustment to a single step in the process (whichever step performs the worst), keeping everything else the same for the next round of testing.

Poor cashflow management

Cashflow describes the difference between revenue (income) and expenses on any given month. Get it into your head: positive cashflow is the most important financial goal. It doesn’t matter how much money comes in just so long as it never exceeds what’s going out.

Even a 7-figure coach can go bankrupt with bad cashflow. Seriously: I’ve seen it happen. On the other hand, I’ve been able to keep my business afloat even during months where I made less than minimum wage.

The biggest financial mistake I made early on was due to a naive reaction to an unusually good month in the early days. I’d scored myself a 5-figure month within a few months of going full time as a coach, and so I decided I had it all figured out. I spent money according to how much I made on that good month, as if I was still an employee on a steady paycheck.

Fast-forward 6 months’ later: I haven’t had a new client in months and I now owe money to my parents! I had to get a part time job just to make rent.

Entrepreneurship income is a roller coaster at first. There’s more luck than design involved at the start, so you need to spend as if times are tough, even when you get a good run.

I recommend the book Profit First by Mike Michalowitz – his system guarantees you won’t ever overspend and give yourself the cancer that kills most businesses: bad cashflow.

Ignoring the warmest leads

Nearly every service entrepreneur I’ve ever worked with – and myself included – has felt averse to contacting people close to them as potential clients. Some coaches are so averse to it that they begin with trying to find “cold leads” (people they’ve never met), and won’t even go near someone they have already had any form of contact with.

This is more of a confidence problem than anything else. You’re afraid you’ll be judged, embarrassed, or rejected by people who know you… who will then go on to tell everyone etc.

But look at it this way: until recently in human history, nearly every business owner lived in a small town or close-knit community. This means they personally knew most of their clients. There would have been blurry lines between customers and friends. And businesses have functioned just fine in this situation for thousands of years.

There’s no rational reason why you can’t approach those known to you first. If you have a good product that will enhance their lives, something they’d probably end up purchasing from someone at some point, then why shouldn’t it be from you? They get what they need to improve their life and they get to support someone they know. Win/win.

Get over yourself. Contact your old workmates, and Facebook friends, and connections from high school… first.

To give you a sense of this: in the first 4 years of being a coach, nearly half of my income came from people in my salsa dance class.

Spreading yourself thin (Shiny Object Syndrome)

When you don’t know what you’re doing and you have a touch or more of ADHD (common in entrepreneurs), you’re likely to try any idea that pops into your head. You’ll be easily distracted, easily scammed, and struggle to stick to something unless it shows immediate results.

Almost any classic approach to building a business will work if you can just stick with it long enough to get good at it. Sticking with something for a long period of time is so much more important than trying to find a one-hit-wonder approach.

Instead of trying to be a viral hit, just put out one video per day and try to make it better than the last video. Instead of changing your niche every time you think of a new problem to solve, let go of those enticing ideas and get back to repeating what you’ve already done before.

Dedicate yourself to making something work, rather than trying to find something that works well straight away.

Sure, you also want to avoid sticking with something that clearly doesn’t work, so this is a balancing act. One way to balance the need for innovation against the need for discipline is to schedule long term tests.

Give the current approach at least 30 days of repetition before you decide if it’s worth continuing with. Don’t change anything before the 30 days is up. And if after 30 days the numbers are looking promising, do it for another 30 days. If the numbers are terrible, try something else.

Being desperate for money

It took me years to finally see a pattern in my business that I’d already noticed in my dating life: the more desperate I was to get something, the less likely I was to get it.

The bane of any new service entrepreneur’s existence is their neediness for money. It’s rarely greed; it’s more of a desperation to make this work and have the dream of doing what you love for a living come true. The problem is this neediness is nearly impossible to avoid (especially when you have kids and responsibilities), and yet it will be felt by your prospects and put them off from buying more than just about anything.

One of the biggest problems I’ve ever had to solve for myself and my business clients is how to maintain non-neediness in the face of tough times. When you most need a client, how can you authentically not care about whether this prospect signs up?

There’s no quick fix for this, but there are some practical solutions.

In the early days, consider maintaining a part time job that covers your basic living expenses (i.e. the least amount of work needed to survive). That way you can go onto sales calls without literally needing the sale. Reduce your spending to bare minimum so that you don’t need to make much money. Spending is the element you can most control in your finances, and focusing on it will give you a sense of power.

If you measure your numbers, eventually you’ll discover the number the matters most: your conversion rate. How many people do you need to reach out to before you get a new client? For most newbies, it’s somewhere in the 1% area, i.e. on average you need to reach out to 100 people to get one new client. Knowing this number can give you something better to focus on than signing up this prospect. So when you’re on a sales call, you can tell yourself “I don’t need this guy to sign up, I just need to keep creating calls”.

I use a free session as a sales process, meaning I don’t actually “sell” my coaching, I give it to people as a free sample and it sells itself. This approach can create a great escape from neediness. When you make it clear that you won’t be selling on this call, both you and your prospect can relax. Tell them, “If we both want to work together after this, we’ll book in another call to figure out the details”.

You don’t have to do it alone

Business coaches and mentors make a huge difference. I’ve personally spent over $150K on business coaching for myself, and it has paid for itself and then some!

I can help you, but I only work with people who have properly gotten started, so make sure you’ve at least run this test before inquiring with me about more support.

Otherwise, contact successful entrepreneurs you know and ask them to recommend a mentor or coach. This is probably the best investment a new entrepreneur can make.

 

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