6 Business Mistakes You’ll Probably Learn the Hard Way

Summary

• I own a portfolio of companies that generate over $250 million a year, and I've identified six common business problems that prevent growth. Here's how you can tackle them.

• Serving Too Many Avatars: Focus on your ideal customer profile. By trying to please everyone, you're essentially pleasing no one. Narrow your marketing to attract the right audience, which will make your advertising more effective and sales training simpler.

• Underpricing: Most business owners undercharge, comparing themselves to the average of the marketplace. Just raise your price; you might get more "no’s," but you'll make more money. Handle existing customers by announcing price changes tactfully and offering temporary discounts.

• Overcompensation: If you're paying too much, especially for roles without accountability, it's time to reassess and reduce costs. This is similar to a price raise but on the expense side; it may mean restructuring your employee agreements.

• Overextension: Stick to your core business. Avoid shiny new opportunities that distract from your main goals. Grow by improving, not just expanding. Only scale when your current operations can sustain it without you.

• No Data Daddy: If you're guessing your way through decisions, it's because you lack data. Track everything from lead sources to customer retention to make informed decisions that feel like common sense.

• Resolve backend inefficiencies before ramping up marketing. Solving issues like profit margins and customer satisfaction will ensure you have a solid base before scaling.

• Customer Engagement: Prioritize tracking and boosting customer engagement as it leads to lower churn rates. This includes understanding customer goals, improving time to value, and setting essential activation points.

• Remember, growth should be based on problem-solving rather than forced expansion. A solid business fixes internal gaps first, leading to sustainable and scalable growth.

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How To Take Action

I would suggest implementing some straightforward strategies to start fixing common business issues. First, focus on your ideal customer. Don't try to please everyone, because when you do, you end up pleasing no one. Identify who your business serves best and tailor your marketing to suit that specific audience. This way, your advertising will be more effective, and your sales process will become simpler.

Another easy way to add value is by considering a price increase. Often, business owners charge too little. Start by testing a higher price with new customers. If this increase is accepted without too much drop in sales, strategize a way to adjust pricing for existing clients. Ensure you communicate the added benefits they'll receive alongside the price increase.

Resolve issues on the expense side by reducing overcompensation, especially if your team has no accountability. Re-evaluate roles and ensure you're not paying more than necessary. It's similar to raising prices but focused on cutting costs.

Before diving into new opportunities, avoid overextension by improving your core business. An effective way is to track data diligently. Start gathering basic data like lead sources and customer retention rates. This information will help make informed decisions and optimize operations.

Additionally, prioritize customer engagement. Understanding customer goals and tracking their success journey can lower churn rates. Focus on activation points and deliver value quickly.

Remember, solving internal problems leads to sustainable growth, allowing you to scale confidently.

Quotes

"You will grow bigger by getting better, not by choosing to get bigger."

– Alex Hormozi

"Become a genius in the eyes of others by making common-sense decisions."

– Alex Hormozi

"You have to grow through improvement, not through addition."

– Alex Hormozi

"Making more money often requires enduring more discomfort."

– Alex Hormozi

"Without data, you're just guessing."

– Alex Hormozi