4 Money Mistakes that Online Entrepreneurs Must Avoid

4 Money Mistakes that Online Entrepreneurs Must Avoid

Ready to ditch the ‘9-5’ and throw yourself headfirst into the entrepreneur lifestyle? I have to admit, being an online entrepreneur is the dream! Yes, it has its hardships, but watching your business grow, and being in charge of your own future, is the best reward. However, being an online entrepreneur does come with its risks, and let’s face it risk = more scope for money mistakes. These mistakes can lead to cash-flow issues, debt, or even business failure.

So, how can you avoid these classic money mistakes? Dodge the phrases ‘get by’ and ‘break-even’ and visualize success and profit!

 Take things cautiously, plan meticulously, and analyze the risk in order to eliminate these money mistakes from your journey. In doing so, you absolutely will succeed in having your very own PROFITABLE online business!

Tip: Don’t forget to budget for tax payments and other overheads! Download your free Business expenses and income – plan here >

Money Mistake 1:

Not Having Enough Capital

It’s easy to get carried away with the excitement of starting your own online business, even if that means that you don’t really have enough capital to get things going. To ensure success, start off by operating your new online business as a ‘side hustle’. 

It can be hard to start with, working longer hours, and having to juggle it with your daytime job. However, ultimately, you will be able to save more money to invest in your business until it becomes profitable enough to leave your 9-5.

Money tip: Operating as a side business for a while, also gives you more time to define a clear business strategy, budget, and goals for the future. This was essential in the development of my business, as I wanted to make sure my mission was totally clear in order to attract my target clients.

Money Mistake 2:

Not Charging Your Value!

Tip: Listen to this powerful affirmation audio and start building healthy money habits – including charging what you are worth.

Our relationship with money is emotional; we may have a love/hate relationship or otherwise problematic relationship with money. This often manifests in entrepreneurs and freelancers by them not charging what they are worth. Some may suffer from an impostor syndrome, others might be afraid of success, failure, or even – money – itself.

It seems to be a never-ending issue faced by freelancers and entrepreneurs – how much should they charge for their services? When it comes to services, it should be a win-win situation. Do you feel great about providing your services to your clients, or do you have a nagging feeling that you are giving more than you get back? Think about your ideal client – are they someone who cannot afford your services? Absolutely not.

Money Mistake 3:

Poor Budgeting

 The number one rule in starting an online business is budget, budget, budget! Not doing this, is a classic money mistake for online entrepreneurs. First of all, budgeting is not difficult – we just often have a fear of numbers. They are just numbers, but you must be aware of those numbers.  

Make sure to open two separate bank accounts once you start the business; a personal account and a business account. Keep your business and personal life separate! In terms of budgeting within the business, it’s essential to account for paying yourself too. Think about how much you would pay someone to do your job, and value what you can bring to your business. A business can easily become your baby, and it’s easy to not pay yourself when you want every penny to stay within the company. Online entrepreneurs should avoid making this money mistake. If you need to, in your personal life, you can start by saving income towards your business endeavors. Think about eating at home, buying second-hand clothes, upcycling old items, and vacationing in your home country in order to save cash. It’s important in the first year of building the business to be careful and not to spend your personal money too frivolously. Remember that it is only temporary. 

Money Mistake 4:

Failing to Understand IMPORTANT Investments.

Money Tip: To avoid temptation with investments, start out with a debit card rather than a credit card.

The business is new, it’s growing, and you’re excited to spend some of your well-deserved earnings. But what do you really need to invest in? What sort of investments should be left until the business is well established? Whereas, investing in a strategic marketing plan or a streamlined website, is key to overall business success.

I learned this the hard way when I started my online business. I poured all my energy and resources into doing everything by myself, in order to cut corners and save money. This actually cost me more money in the long term. One example was my website. I was intent on doing this myself and spent months teaching myself how to develop it. Really, I should have invested the money into hiring a qualified web developer straight away! They would have had the website looking perfect in next to no time, allowing me to gain business faster. As a result, these are my top tips on how online entrepreneurs can avoid this money mistake:

💰Invest in excellent staff. Remember that the talented people, who will help your business grow, are going to be more expensive. However, it’s far better to pay a higher price for a high quality of the work, than to invest in cheap staff who might actually affect your business success in the long-term. So spend money on a web developer, spend money on a professional photographer, and spend money on kick-ass advertising!

 
Additionally, focus on your strengths! Hire people to help you, to take on the tasks that you are weaker at. For example, are you hopeless at social media? Is this really the best use of your time? Hire a social media manager, so that you can direct your focus on other tasks that will help you to generate income.

💰Hire an accountant. Don’t waste time getting your head around the tax system- hire an efficient accountant who can save you time AND money!

💰Hire a business coach! Many people, see this as a luxury but a business coach will help you to map out the vision for your business, go over the fine details, and advance your profitability ten-fold! Not only that, but they will help online entrepreneurs (you) to avoid these key money mistakes.

Taking the leap to become an online entrepreneur is an exciting step towards living the life of your dreams! Take things cautiously, plan meticulously, and analyze the risk in order to eliminate these money mistakes from your journey. At the same time, have fun, and go outside of your comfort zone (be visible online!). In doing so, you absolutely will succeed in having your very own PROFITABLE online business!