Adam Fineberg, Founder and CEO of My Personal Recruiter.
Starting a business is exciting, but it can also be challenging. I see many entrepreneurs make common mistakes that hurt their chances of success.
Whether it’s relying too much on one revenue stream, setting the wrong prices, spending money on the wrong things or not delegating tasks, these missteps can have big consequences. The good news is you can avoid these mistakes with the right approach.
At the beginning of my entrepreneurial journey, I was full of enthusiasm but quickly realized that excitement alone wasn’t enough to succeed. I made some of these same mistakes, and while they were tough lessons, they helped me grow. By sharing these insights, I hope to help others avoid the pitfalls that I, and many other entrepreneurs, have encountered.
1. Relying On One Revenue Stream
Many new business owners depend too heavily on a single product or service. This can be risky because if that source dries up, the business could struggle. During the Covid-19 pandemic, many businesses that only made money from in-person sales had a tough time surviving.
Instead, building multiple income streams, such as adding online sales, subscription services or digital products, can make a business more stable. A good example is from the food industry. Restaurants that started offering takeout, delivery and online sales did much were able to not only survive but thrive, continuing many of these practices after lockdowns were over.
When I started my first recruiting agency, I depended solely on contingency placements, which meant that every month, I had to make placements or the company wouldn’t be profitable. It was exhausting and unpredictable.
I realized that I needed to create more revenue streams. That led me to launch smaller, more autonomous businesses. They required less time and capital but gave me the ability to diversify and avoid relying solely on one revenue stream. This shift not only stabilized my income but also helped me build lasting relationships with clients and offer more value throughout their careers.
2. Pricing
Setting the right price is critical. Pricing too low might make your business look cheap and not profitable, while pricing too high could scare customers away.
The best way to avoid this mistake is to research the market and understand what your customers are willing to pay. Offering different pricing options, like packages or bundles, can also help attract more customers. Studies show that giving customers a choice between different pricing options can make one option look more attractive.
Within the first year of launching my resume-writing company, we reached full capacity with the number of orders we could handle. At the time, we were charging $149 per resume—significantly lower than the market range, which spanned anywhere from $5 to $3,000.
Despite being one of the most affordable options available, we had clearly found demand. The obvious next step was to raise our prices and introduce additional services tailored to the needs of our buyers.
3. Spending On The Wrong Things
New entrepreneurs often spend money on things that don’t contribute to business growth, instead of focusing on investments that will provide real value. A smart way to manage spending is to focus on affordable strategies that bring results, like using social media and content marketing instead of expensive ads. You can find great success by building a strong online presence. I recommend you regularly review your budget to avoid unnecessary expenses.
Early on, I found myself overspending on branding before validating profitability. I got an office, did renovations, decorated and bought furniture, all before bringing in steady revenue.
Within six months, I had to liquidate everything and lost money on the equipment that could not be resold. That experience taught me a tough but important lesson: Never focus on the office space or take on major expenses until the business is profitable.
4. Not Delegating Tasks
Many first-time business owners try to do everything themselves. But while it can take more work upfront, delegating to team members or outside help for jobs like accounting or marketing frees up time for bigger decisions.
You don’t always need to hire full-time employees to delegate. Many businesses succeed by working with freelancers or using tools that automate tasks, like scheduling social media posts or managing customer service requests. Learning to delegate effectively can significantly enhance productivity and efficiency.
In my first company, I tried to handle everything on my own, from client communication to administrative work. As the workload increased, I began overextending myself and making avoidable mistakes due to exhaustion.
Eventually, I realized that my reluctance to delegate was holding my business back. Once I started trusting my team with responsibilities, productivity improved, and I also had more time to focus on strategic growth.
How Technology And AI Can Help
Technology can help entrepreneurs grow their businesses faster. Tools that use artificial intelligence (AI) can analyze customer behavior, helping business owners make better decisions. Automation can reduce the amount of manual work needed, boosting productivity and improving customer relationships. For example, AI-powered chatbots can answer customer questions any time of the day, giving small businesses a way to compete with larger ones.
AI tools can also help with marketing. By analyzing trends and optimizing campaigns, these tools can help business owners spend their marketing budgets wisely and get better results. Additionally, AI-driven analytics can highlight potential issues early, helping businesses make proactive decisions.
Final Thoughts: Staying Flexible
Starting a business is hard work, but avoiding these common mistakes can improve your chances of success. By diversifying income, pricing wisely, spending smart, delegating and using tech, entrepreneurs can build strong businesses.
The key is to stay flexible, keep learning and focus on what drives real results. Mistakes will happen, but with preparation and the right mindset, they can become opportunities to grow. Being open to change and embracing new strategies can set the foundation for long-term success.
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