As the first African-American woman in history to hold a patent for a natural hair care product, Gwen Jimmere, founder and CEO of the world-renowned Naturalicious hair care line, is no stranger to the ups and downs of entrepreneurship.
For many entrepreneurs, the beginning of running a business is very exciting--you're passionate about having your own business and creating your own hours, and really, you just love feeling like a boss.
However, this flow of passion can quickly run dry with the common misunderstandings and mishaps new entrepreneurs experience as they build their business. Jimmere shares the top mistakes entrepreneurs make and the keys to avoiding them.
Working In Your Business (And Not On It)
There's a distinct difference between an entrepreneur and a small business owner. When you're a small business owner, oftentimes your business is completely dependent upon your physical presence. However, Jimmere says, "An entrepreneur works to grow their business to a point where they're able to scale it and become the CEO, allowing them to work on the business, and not in the business."
Jimmere explains that becoming the CEO of your business is the goal because you don't want to experience a situation that forces you to leave your business for some time (such as unexpected sickness, or God-forbid you dare to take a weeklong vacation)--and then your business falls under because the only way you make money is if you're the one who physically handles everything that needs to be done.
You want to grow your business to the point where, regardless of the situation that requires you to leave your business for a period of time, you know your business will continue to run well without your presence and your family will be taken care of.
Not Factoring In All Your Costs
This is especially pertinent to entrepreneurs who create products. "Oftentimes when entrepreneurs create products, they only factor in raw materials, and they don't consider the cost of the labor that is required to create the products," Jimmere explains.
As mentioned previously, in order to scale your business, you must remove yourself from working in the business, and this requires you to hire people either as contractors or employees.
As a new entrepreneur, you're likely not paying yourself a salary, which means you're probably not factoring in the costs of labor. Jimmere states this is a mistake. "If you don't factor in the cost of labor, you'll be in for a rude awakening when it comes time to hire people, as your costs will increase significantly."
However, if you consider all of your costs in the beginning--including labor--when it's time for you to hire, you'll be fully aware and prepared to pay them accordingly.
In order to know costs for labor, consider the job. For example, if you make beauty products like Naturalicious does, odds are that when you scale your business, you'll need someone whose job is to order the necessary ingredients and supplies needed to create the products. Think about how much the job is worth. Is it a $10/hr job? A $15/hr job? Jimmere suggests assigning a per hour value to that job, and then figuring out how long the job takes by timing yourself.
Jimmere also stresses the importance of factoring costs when you're selling to retailers. She says, "This is important because you sell your products to retailers for a fraction of what you sell them to consumers, and your margins can decrease dramatically if you don't factor in all of your costs at the onset."
Doing Everything Yourself
Jimmere believes that as an entrepreneur, no one can sell your business like you can. However, you should still hire people who are competent, excellent at what they do, proactive, and care about the mission of your business.
"When you outsource and delegate tasks, you'll incur more expenses because you have to hire people; however, your sales can grow astronomically because you, as the CEO, will have more time to actually grow the business--as opposed to having to spend your time making products or providing services all day," Jimmere says.
You can delegate anything--it doesn't just have to be tasks that solely pertain to your business. If you're apprehensive about delegating business duties, Jimmere recommends delegating personal things first, such as housekeeping or cooking so you have time to do activities like go to the gym and relieve some stress. You can delegate to your spouse, a family member or friend, or even a company or individual who specializes in such work.
Or if you're a mom, think about delegating a task that you usually do for your child (like picking them up from school) so you don't have an overwhelming to-do list for both your business and personal life.
Jimmere suggests looking for like-minded individuals who can provide support for you when you need it the most. For example, in certain cities, there are groups of moms who volunteer to babysit each other's kids, and this is great for moms who don't have a built-in support system of family and friends. You can also look into working with local college students for college credit or hiring a virtual or local assistant so you can lighten your load.
Jimmere lives by the motto, "Waiting is not a wealth strategy."
She says, "Waiting to figure out how you can delegate certain tasks only delays your prosperity. Just do it. Being an entrepreneur is a lot of emotional, mental, and physical work. You can't operate at an optimum level if you don't take care of yourself. You'll be a better entrepreneur, parent, and partner when you make self-care a priority."
Not Having Systems In Place
Entrepreneurs tend not to have systems in place to accommodate the growth of their business. Jimmere stresses that you must have systems in place to ensure the long-term success of your business.
Having reliable systems allows you to automate tasks in your business, so Jimmere recommends doing research to see what available tools and programs will allow you to automate certain duties.
For example, if your business is ecommerce based, most platforms allow you to automatically send an email to a customer after the customer places a product in their cart but doesn't make a purchase--otherwise known as an "abandoned cart campaign."
Jimmere states, "With this automated sequence, you, can send multiple automated emails to customers if they abandon their cart. This is an inexpensive system that allows your business to invite customers back to your website, without you having to manually email each customer."
"At Naturalicious, we use Shopify as our ecommerce platform, and it allows us to create this valuable campaign that converts about 20% of customers who had previously abandoned their carts. You must remember, these are customers who probably weren't going to purchase if they didn't get this series of emails. So we see 20% more sales just by setting this up once and forgetting about it. This allows us to make more sales and not work nearly as hard to get them, which means I can focus on other parts of growing my business".
Automation is important because depending on the programs and platforms you use, you may have to work harder to get sales if the platform doesn't come with automation capabilities.
In the beginning stages of your business, you might have to cut back on your Starbucks trips so you can spend, say, $50 more, per month, on automating certain tasks in your business. However, a small investment like this can yield thousands of more dollars of revenue.
"You can't build an empire off of dirt cheap or free resources," says Jimmere.
Not Getting Out And Meeting People
Nowadays, entrepreneurs can network online, but meeting people in person sets the foundation for creating strong business relationships that are mutually beneficial. This is why Jimmere says it's vital for an entrepreneur to get out into their city and build relationships with other businesses.
As much as we're a digitally social society, people still crave human interaction because we're social beings.
Jimmere says, "An entrepreneur who just sits behind their computer, runs their business from their home, and doesn't go to networking events is missing out on facetime with influential people who can help them take their business to the next level."
Simply showing up to places can help your business tremendously. "This is another reason why it's important to be able to work on your business and not in it, because if you're the one doing all the work in the business, you won't have time to attend conferences or networking events," Jimmere explains.
Social media is a great way to network for your business, but there are opportunities you miss out on when you limit yourself to online platforms.