Entrepreneurship Pitfalls to Avoid

Introduction

Speaker 1

Welcome back to another episode of Black Girl Fly. I'm your girl Tenisha Nicole.

Speaker 2

And I'm Tashaunda Dixon.

Speaker 1

And today, you know, I think we want to delve back into a topic that we attempted to solve with you all. I think we were just kind of shell shocked by the reality. You know, maybe it's the dissonance because I think our reality is slightly different than what the data shows about, you know, specifically black women in business.

Speaker 1

But I think just the pursuit of business feels so prevalent right now. Like, I think the data we looked at, although is about ten years old, I doubt that the current data shows a much different picture. I'm sure the numbers are higher, but I bet you the difference between business ownership, between different races and genders probably hasn't improved that much.

Speaker 1

And so we want to take some time to talk about. I don't know if we're going to dispel myths, but I think we want to talk about just what are some common things to look out for in terms of business ownership back in that are reasons that businesses can fail? Yeah, right.

Speaker 2

As I say, I have so much that I can think of because I've had a number of businesses that are no longer in business.

Speaker 1

Yeah, same. Same thing.

Invest in your Business

Speaker 2

I would say truly investing in your.

Speaker 1

What you mean by that.

Speaker 2

Like this. Oh, so we owned an escape room several years ago, and we actually had a really great model. It was a great time to be in this business. We even had a lot of foot traffic in the lot of people interested. But I just don't feel like we invested in the quality.

Speaker 1

I'm rolling my eyes over here because that was my biggest sticking point.

Speaker 2

Yes. So. So I would see really making that investment. Right. And and honestly, I don't think we had it when we were trying to do it. And so it's not that it's not that we just chose not to, but it's kind of I guess it's more of less understanding the cost of business.

Speaker 1

Well, I would disagree with that statement. So this is not an episode marking on all the businesses that we had together. But I want to challenge what you just said that we didn't have because you know, I did something scary recently and I got a business line of credit. Right. And I didn't want to because I was like, well, why do I need that?

Speaker 2

Maybe if I didn't know enough.

Speaker 1

About leverage, not knowing enough about leverage. So maybe we can say lack of education, but I'm going to challenge the fact that we didn't have it because guess what? People find it. Yeah. Who won it? And we could have found it had we wanted to find it. I agree. With that. The business was doing well.

Speaker 2

But we didn't think. And I think part of the problem is that we didn't think that it was detrimental. We didn't get it was so necessary that we should do whatever it takes to make it happen.

Speaker 1

I agree. We did not prioritize that. And even if we were to if we did invest in that, I think we had a number of other challenges in our business that would have prevented it from growing. So I understand why we didn't do it back then. I think I think.

Speaker 2

That the business could have been pretty successful.

Speaker 1

I think the business could have been successful. I don't think under the ownership.

Speaker 2

Yeah. And so that and all that.

Choose your Partners Wisely

Speaker 1

So that's another challenge. I think that with business ownership that can happen, that can lead to challenges in the business is actually.

Speaker 2

Can you elaborate on what you're talking about?

Speaker 1

I know I'm trying to I'm trying to finish my sentence, like but I think it's you know, when you think about starting a business, who might be involved in that process. Yeah. And so I'm not going to say like, you don't have to have partners in your business, but you might have a partner. You may have multiple partners they may be your friends, they may be your family.

Speaker 1

I think when you layer on different components like that, it adds another layer of complexity does.

Speaker 2

And I really have seen that a couple of times, I would say, to having an exit strategy, sitting down upfront and understanding that, hey, if this doesn't work, this is how we're going to dissolve it, or that's how we're going to keep it going, or this is how we're going to. Whatever that strategy may be. And that is critical starting out.

Speaker 1

Have that set up going into the partnership.

Speaker 2

Yeah. Yeah, that's huge. I think that in many cases, actually at least three of my entrepreneurial endeavors, I think that I should have done that I should have learned from the first couple, but but at least three times in my career. Right. Has that been a huge issue with me moving forward?

Speaker 1

Yes, I think that was a huge challenge in our business and for multiple reasons, like I think just personality type communication styles. I want to say even some drama like some perceived well, you know, things that were going on.

Speaker 2

In one case, I went through a divorce and I was like, oh, crap, we can't put this business in half.

Speaker 1

Exactly right. Like, how do you explain that? So definitely being thoughtful about who and if you partner in your business and getting that clearly articulated on the front end rather than, you know, as the business is blowing up or as y'all's relationship is blowing.

Intentional Marketing

Speaker 2

Something's going to blow up historically. So. Okay. So but other place that I think is super critical is like things like marketing. Like making yourself visible, like, you know, giving out to your customer base.

Speaker 1

So I don't know, I would challenge this like oh, and what's your stance on it? You think that?

Speaker 2

I think that you need to invest in doing that. Doing that? Yeah.

Speaker 1

So this is one that I struggle with a lot because I think when we talk about the escape room business that we had together, we didn't have a list. We didn't have a formal marketing plan. Like we we weren't. But guess what? We were still getting customers and we were still pretty successful. But our marketing, we had a marketing hack that we were actively using, which was the Groupon venue.

Speaker 1

Right. And so there was some channel, but we weren't posting on Instagram three times a day on Facebook.

Speaker 2

So I, I am saying that marketing is more loosely, more marketing more loosely like, like it's not about winning the most dollars or having some elaborate plan, but you have to have a way to get to your in, in the user. Yeah, yeah. And that could be like you could say, I thrive on word of mouth. I do a really great job.

Speaker 2

And then I tell my Mike person that I service tell all your friends. Right. Right. But but I'm saying that as a whole, I don't think that young entrepreneurs or minority entrepreneurs put a lot of thought into how you get there. We just open the doors where someone's going to come by.

Speaker 1

So I see the opposite. I see businesses who just are posting on social media. But that's not a good idea.

Speaker 2

To your to your client. Like.

Speaker 1

Yes, it is. Are you kidding? Yes.

Speaker 2

So let me clarify. Posting on social media It's a tool, but it has to make sense for your.

Speaker 1

Business and so that.

Speaker 2

You have the right audience. It has to have the right whatever. I've seen people and so I guess why I took that assumption, because I've seen people just post about stuff on social media.

Speaker 1

That's what I'm saying. Yeah, but.

Speaker 2

It's not.

Speaker 1

It's the fact Haagen-Dazs. And that's one that's what I'm trying to say. I think we're in agreement here. Like the the miss is not having a marketing strategy and just doing any old thing right? Like not being thoughtful and intentional. It's not really about the amount of money you spend on. It's not about like posting on social media.

Speaker 1

It's about doing what's right for your business to reach your end user.

Speaker 2

Yeah, right. I completely agree. Okay.

Speaker 1

So I think I was like, I think we're getting lost in here. We're saying the same thing. But, but yeah. So the other part about marketing is that I actually don't market for my current business actively, right? I mean, marketing is inherent like you do it in a way that's authentic to what you do. So it's not going to look the same for every business.

Speaker 1

So I don't think I can say that I don't market because I do but it just looks different. There may be a different like a product based business. Yeah.

Speaker 2

Like, yeah, yeah.

Understand the Cycle of Revenue

Speaker 1

And so what would be some other things other people.

Speaker 2

Understanding the cyclical nature of revenue and expenses. Yeah. That's like having reserves for the downtimes. Yeah. Understanding that downtimes will come and then that peak times will come. And you can't really like it's not the same as a paycheck. It's not the same amount. It's going to come every two weeks and that's how it's going to work. And you have to be able to plan and account for and still be in business if there's some low ones, right?

Speaker 2

Yeah, I think that's huge.

Speaker 1

That is so huge. And I experienced a lot of that as well. And I think one thing that people can do to hedge for that is I mean, you can know that it's going to happen, right? But I think you can also build in other streams of income either within your existing business or just within your whole financial plan that help help you ride the tides like as they go up and down.

Speaker 1

So that's definitely something to think about. And it could be, you know, if you have a service based business and it ebbs and flows, maybe you add a product to it that has pretty consistent, you know, revenue time or overtime.

Speaker 2

Or an additional like my pricing stream. So so for some so I work in productivity there. So. So some things have a service that people just pay monthly.

Speaker 1

Yes. Subscriptions are super helpful. Yeah.

Speaker 2

Or have people on different payment timing like companies like quarterly. Some people pay annually, some people bi monthly, some people buy.

Speaker 1

So you always have something coming in.

Speaker 2

And there's things that you can do. Like to me you're saying introduce the product line and whatnot. If you aim your service differently, you can change your pricing model and do everything. So I just think it's huge. But and also minimize your expenses paid things upfront do pre-payments understand when you when you're at peak season and things like that?

Speaker 1

Yeah. Look at your financials. Yeah. I think that's going to be one.

Speaker 2

That's your pattern. Yes.

Speaker 1

Yeah. Find your patterns. I mean, I don't think you have to be like a money whiz, but like you have to kind of understand what's going on. In your business. And we did an episode talking about taxes and this plays into it like having understanding and understanding of what's what the money side of your business looks like because that can have huge consequences during tax time.

Speaker 1

Like you end up with this huge bill because you weren't thoughtful about the way you were spending money, like in the deductions that you could be taking throughout the year. So definitely have visibility on your finances I would add the systems in your business, like if you're trying to scale, if you're trying to scale up some broken systems, it's going to make your life a huge, huge challenge.

Know your Worth

Speaker 1

Automate.

Speaker 2

Your automate your your businesses and your systems to you, that there are things that you can do to save time in what you're doing today. That was one thing I thought that I had to like brute force everything, but I was in business like I was like, I'm going to do this and I'm going to do this and I'm right this.

Speaker 2

And I could have gotten someone else who was more skilled, who had more time, kind of offloads different things. And I didn't think about that exactly.

Speaker 1

And I'm like, if you're starting out and you're starting small, you actually can't afford to be doing everything. Like, you can't be building what your content is dealing with the financials. And I know.

Speaker 2

Conception especially like in the black community that you like, I can't afford to do it. I'm just going to do it all.

Speaker 1

You can't afford to do it all.

Speaker 2

But, but, but I think well, I know boss myself personally. I grew up thinking it's cheaper for me to do this. Do it. I had no concept of of my time is worth this this amount, right?

Speaker 1

Yes.

Speaker 2

And I think that's part of it to your mentality. So I built about your business and and knowing your worth, like. Like. I think that's a whole nother section there. Oh, yeah.

Speaker 1

Oh, yeah.

Speaker 2

Early on, I'd asked or I get these questions from from customers who came through discount who why so expensive? And I'm like, dude, you would go to like business and not asking the same questions. And paying a little bit, even a little bit more at this other place who has a, you know, comparable product to mine or PayPal service to mine.

Speaker 2

And so the next thing that I'm saying is, no, you're worth.

Speaker 1

Yes, it.

Speaker 2

Is. Set the expectation and hold to that and know that you're worth it, that you don't have to have been in order to make this thing happen.

Speaker 1

I 1,000% agree with that. And if that means you have to say no to some customers and guess what, you probably saved yourself a bigger headache are also the worst customers ever. Yes. So if there is someone who's trying to get a discount, you better believe they're going to be nagging you the entire time. So setting your standard around your worth is just so critically important for so many reasons, but it's going to help weed out the people who are not your target.

Speaker 1

Yeah, right. And so you can work with the people that you were set up to work with. And so that means, you know, you really do need to understand who you're trying to serve so you can build your business around that. Yeah. Which is really important.

Speaker 2

I feel like this list can go on and.

Know your Competitive Advantage

Speaker 1

We really we really could. We really could I'm going to be like, could I say one word? That would be what would it be? I guess the the last thing I would say is like, no, your secret sauce.

Speaker 2

Yeah.

Speaker 1

And so.

Speaker 2

Competitive advantage.

Speaker 1

Yes. Come on with it. With the you know, I was simple like but I'm like, no, your competitive advantage in this is so critically important because, number one, it will have you not doing stuff that you shouldn't be doing. Right. It will have you not owning your calendar and scheduling meetings because your brain is like needed for something very specific.

Speaker 1

A money generating activity. Right. That is the secret sauce of your business and why you don't have competitors because no one does it like you. Right. This is going to be important when you think about your pricing and all this other stuff. But I would say that to me has been a recent revelation Yeah.

Speaker 2

I can definitely see that. There is so much, though, and I think it's it's the same. So I don't want to say that it's so much that you can't tackle it so much. But once you get those things in place, it really sets you up for success.

Speaker 1

Yeah. And they're not hard. You just got to do like. So look out for more episodes about business ownership and entrepreneurship will definitely be talking more about that. But until next time, I'm your girl Tenisha Nicole and

Speaker 2

I'm Tashaunda Dixon.

Speaker 1

Addiction and we are black girl fly.