The Biggest Mistakes When Starting Your Business

Regardless of what you sell, each and every one of us is in the marketing business.  The failure or success  of a business depends on its marketing.

But we frequently spin our wheels thinking we are doing it right and wondering why it isn’t working.

I’ve put together some common mistakes made by entrepreneurs when they market.  Are you making any of them?

1. Targeting too broad a market (who you’re selling your products or services to).

If you tell me that your customer is everybody or even everybody who needs to send a gift, then I’m talking to you.

Even if your product  CAN be used by just about anyone, not everyone is going to buy it. They don’t have the money or the interest or whatever. And when you try and target everyone, you really end up targeting no one.

The way to start making money (not to mention getting better results with your marketing) is to narrow your target market. However, there are pitfalls with that as well, as we see in the next mistake.

2. The wrong target market.

This happens when you’ve chosen the wrong target market. What do I mean by the wrong target market? They either aren’t interested in buying your product or they don’t have the money.

For example, if you are selling high-end luxury gift baskets, you wouldn’t want to market to Realtors who sell condos.

3. Not giving them a reason to buy from you.  

You know you’ve got a good target market and you know how to reach them. But you’re still not getting any results.   The problem might be what you are telling them.

People have a lot of choices on where to spend their money. You have to give them a very compelling reason why they should spend their hard earned money with you.

Here’s where it makes sense to spend more time on your writing skills or hire someone to write your copy for you. If the descriptions of your products are generic or if that sales letter you sent out is ho-hum, you’re wasting your time.

4. Not reaching your target market often enough.

So you’ve run one ad. Or mailed one postcard. Or attended one networking event. And the phone isn’t ringing or the orders aren’t pouring in.


People forget.  You aren’t important to them.  And they aren’t going to remember you unless you stay in front of them.  It isn’t your customer’s job to remember you.  It ‘s your job to remind them you’re here and would love to have their business.

5.  Getting feedback from the wrong people

Are you asking your friends or family members for feedback about your products or service?  What do friends do? Encourage you!  They’re afraid of hurting your feelings because they want to remain your friend.

Or perhaps you are posting pictures on a Facebook group that you belong to and asking people to tell you what they think.  These types of groups have members of all levels of experience.  You may be getting input and suggestions from some who are even greener than you are.  More experienced people usually won’t take the time to critique you because they either don’t want to discourage you or they are just too busy with their own business.

The people to ask are your customers and potential customers.  When I first started my business, I put together a group of potential customers that I had met through networking and organized a breakfast referral group.  During these breakfasts, I would frequently bring in a gift (either the actual gift or a photo of it) and ask for their opinion. We shared opinions as well as ideas and referrals.

6.  Neglecting to build an email list

This is a mistake that I made in the beginning of my business.  I thought that all I needed to do was sell a good product and provide good service and they would become repeat buyers.

Not so.

I was super wrong.  I should have collected emails from every customer and even created ways to get emails from potential customers who visited my store inside our local antique mall.

This goes back to Reason #4.  Without an email list or even a direct mail list, there was no way to reach them with ideas for new gifts or even to remind them that the birthday person they ordered a gift for last year has a birthday coming up this year.

7. Thinking that Social Media Marketing is Marketing

Most small business owners think that social media is marketing.  Actually social media is just a little piece of the big marketing puzzle.  In my experience, doing JUST social media is not an effective use of marketing time or money. Social media has to be a part of a larger planned marketing campaign.

It can be a  powerful to build relationships, but standing alone as a way to generate sales is not a good idea. Facebook pages used to be a reasonable way to get leads, but unless you pay to boost your posts, most of those who have liked your page will never see what you post.  You should have a Facebook page but that should be just one part of the many parts of marketing.  If you are using social media to sell, remember that some of the other social media platforms (Twitter, Pinterest, Linkedin and even possibly YouTube) also need to be in the mix.

You should never use social media as a way to directly spam your customers with links and advertisements. That’s a fast way to get your profile blocked and  your business ignored. The key to using social media marketing is making sure that you’re creating interesting and engaging content.

Make sure that your posts are things that your customers will find interesting enough to read. Educate them about your industry and products instead of just sell, sell, sell.

8. Not being REALLY excited about your business

If you are just starting your business, you have to give it everything you have and spend lots of time and energy into it. You can’t be half-in while trying it out to see if you like it or if it will work for you.

Even if you’ve been in business for years as I have, you must be excited enough about your business that you work it regularly and think about it when you’re not working.  I go to the gym or walk in the forest for exercise because I spend so much time at the computer and in my studio.  But even when I’m walking or riding the bicycle, I am thinking.  Thinking about how I could design this or how I can market that.

If you are not passionate, I mean REALLY excited about your business, stop and do something else. Get a job, pick something else or figure out what you would love to do but stop torturing yourself. Life is too short to be an entrepreneur who isn’t in love with their business.

9. Not planning for the future

If you don’t know where you are going with your business, how are you going to market to get there?

I plan a whole year in advance.  Some people plan even more.  I take the time to look back at the previous year and decide what worked and what didn’t.  Then I determine where I want to be at the end of the year and how best to get there.

10.  Not telling people what you sell

You would think this comes naturally but it doesn’t.  You can’t assume that your customers know what you sell. They may know that you sell gift baskets but do they know that you sell welcome gifts or baby gifts or whatever other unique gift ideas you have.

I learned this when one of my best Realtor customers who bought thank you gifts for every house she sold, told me that she had ordered apartment welcome gifts from one of the big companies that specialize in them for an apartment complex that she had taken over the management for.  She was complaining about the cost of shipping when I told her that I made and sold these and shipped them all over the country.

Both she and I were surprised that she didn’t know about this branch of my business.  You have to let your customers know what you sell.

These are just ten of the major Marketing Mistakes that small business entrepreneurs make.  There are, of course, others as well such as not having a website, or failing to use direct mail and email newsletters.

If you are making any of these mistakes, it’s time to think about what you are doing wrong.  That may be the every reason that your marketing is not effective.

In order to give you even more insights from others in the industry, several years ago I asked a variety of top entrepreneurs the following question:

What was the biggest mistake you made during your first year of business
and how did you overcome it?

After reading their answers I can tell you one thing.  Don’t worry!

Even the top companies made mistakes when they were beginning  so there isn’t any reason why you can’t become successful like they are.


Mistake #1 – Not knowing what customers want: 

Glenda Drum of Baskets from the Heart , located in Shelby NC explains it this way:

“I would say my biggest mistake was not knowing what customers would actually want in a gift basket. Somehow I perceived a gift basket with “cute” little gifty items in there. So I started purchasing cute little things like that to include in a basket to help carry out a “theme.” I soon realized that what most customers want in a gift basket is food.

Unfortunately, once you buy things you are basically stuck with them, so I didn’t really overcome that error and to some degree remain stuck with those type inventory. But I did learn my lesson and basically purchase food for my gift baskets.”

Glenda describes her business as: We provide you with beautiful gift basket designs for any theme, holiday or occasion.  We also offer most live floral service from cut flowers to indoor or outdoor plants.   Also available are gifts in most themes for your alternative choice.  Our business is dedicated to providing the most upscale, unique gift basket designs and service in the area. Our slogan for the corporate market is “Move your gift-giving problems from your desk to mine.”  We specialize in making you look good to your client, customer or employees.


Mistake #2 – Buying food that could be used in only one theme

Sherry Cooter of Bouquets that Stay, located in Dallas Texas tells us:

“Seems silly to say, but after attending a gift basket convention in Houston and looking at the gift baskets in “Gift Basket Review,” I thought I should do the same kinds of designs and bought cases of food items that I used only in one type of theme, like tea cookies in tea baskets and not using them in anything else, etc.  …duh!  Didn’t take long to figure out I wasn’t selling enough to do that without them expiring first!”

Bouquets That Stay provides same day hand delivery and nationwide shipping of gifts and gift baskets
in the Dallas-Fort Worth metroplex.  All occasions, themes, and Texas gifts.

Mistake #3 – Ordering too much inventory

Grace Little, former owner of Graceful Gift Baskets in Spokane, Washington shares:

The biggest mistake I made was ordering too much inventory for the amount of customers/orders I had. Not knowing what kind of inventory I should order contributed to this mistake.

I overcame this by taking more time and really assessing who my customers were and what type of inventory I needed for those clients. This took several years and was an ongoing learning process. I still at times over order. I am afraid of running out or low, so I order more than I need and end up with expired product. Or, I anticipate some products for themed baskets will be popular and want to have plenty on hand (for one…breakfast baskets with pancake mixes and maple syrups, which I way over ordered on!)

On the other side, I have often under-bought, so as not to have a lot of expired product, only to end up being short. In that case, I had to substitute (which I hate doing) so as you can see I still deal with this, although It has improved considerably over the years since 2007.


Mistake #4 – Marketing to the wrong people

 Pam Monroe, former owner of A Gifted Basket in San Diego, California tells us:  “We’re talking 1991 when we had a shop. I didn’t believe people would spend more $20-$30 on a gift so I put very inexpensive baskets out and they flew off the shelves. Then a company asked for a $100 gift basket and I quickly realized I was marketing to the wrong people and I started going after the corporate market.”


Mistake #5 – Had to learn the importance of presentation and perceived value

Pat Carter of Patrice Gift Services, located in Houston Texas, says she made several:

Mistakes I made during my first year – how do I narrow it down?  There were two main ones:

1.  I had a client who specified “no frills” packaging, so I did just that.  People advised me against it, but I was determined to follow the directions.  BIG MISTAKE!  I found out that wowing the client with a presentation is very important.

2.  Thank goodness there are no pictures of the baskets from my first year.  I was so proud of what I did, but it took a prospective client to teach me what “perceived value” is.  Just because I knew what was in the basket, didn’t mean that the client could see it for all of the air.

Figuring out what the client really wants rather than what they say is one of the challenges in this business.
Fast forward to the present – I am still learning something about this business every day.


Mistake #6  Not researching places to buy wholesale before the holidays hit

Celeste Yakawonis of Maine Made Gift Baskets tries to remember:

I can hardly remember my first year in business it was so long ago.  I do remember the biggest mistake was not realizing that at the holiday, companies run out of products , and I did not have a good source for baskets. I got through it by going to a local floral wholesaler and getting baskets. Then I looked for local products to use and I probably got some items from Imperial Foods. I spent the second year researching wholesale companies and the baskets were much better. There were probably forums, but the connection and resources to something like your group weren’t readily available like they are today.


Mistake #7 – Creating what she thought her customers wanted but didn’t

Maureen Dempsey-Basile of  Maureen’s Sweet Shoppe in East Longmeadow, MA tells us:
Wow, one mistake.  How to reduce a whole year to one mistake.  This is really hard.  There were so many big ones. Now that I think about it, I’m surprised I’m still in business.
I think the biggest mistake I made was creating the store I wanted, not the store that met my customers needs.  I had a vision of what I thought would be an instant success. What I ended up with was everything I ever wanted but nothing that would sell.  I didn’t do my market research.  I didn’t pay attention to what the customers were saying.
Through my mistakes, I quickly learned that if I listened to what the customers who visited my store said they wanted, and I created an environment where my they could find those items together with some unique items and traditional products, they would come back more often for gifts and for special treats for themselves.   I grew my business bigger and more cost effectively because word of mouth advertisement is a lot less expensive than ineffective print advertising.  Now, when I go to a gift show or chocolate show, I try to remember what my customers are looking for instead of the item that makes ME say “Ooh, I love that!”   I won’t lie, I still struggle with that, but I try to remember that my storage is full of “I Love Thats,” collecting dust, and my money needs to go towards things that my customers find value in.  Remember, having a beautiful store is a great thing, but having a beautiful store that sells it’s inventory is what’s important.
Maureen’s Sweet Shoppe is a candy and gift basket boutique.  Since 2009, we have manufactured our own chocolates in small batches to maintain freshness and quality. We are known throughout the area for our gourmet Chocolate Covered Oreos and our authentic English Toffee.   
Mistake #8 – Inventory control and over ordering

Derek Thielke of Northwoods Cheese Company, a manufacturer and wholesaler of shelf stable cheese and gourmet foods for the gift industry, remembers:

Inventory control and materials purchasing was our biggest mistake during our first year of business.  We got so excited about our new business, we purchased some boxes that we were doing for a gift for one of our first large customers.  We took advantage of some special pricing that we could get for the boxes and purchased way more than we needed.  We finally worked through about 60% of those boxes.  Check back with me in another 10 years and I will let you know how it is going. What we have done to overcome the situation is to only have one person do the ordering and wait until actual purchase orders come in for our customers, before gathering materials to assemble gifts.  It does create some problems doing this because it extends our lead times, but cash flow is more important than lead times when you think about it.  This situation almost put us out of business.

Mistake #9 – Trying to Fill Every Niche
Sue Temple, owner of Baskets n Boughs in Ashville Ohio remembers:

The biggest mistake I made during the first year of business, was overspending for products -generally trying to fill every niche.  It took me forever to unload most of the hard goods- containers, trinkets etc. After taking a few years off,  I have reopened but working leaner than I previously did. I now cater to a select group of niche customers.  I have learned you can’t please everyone all of the time!!

Mistake #10 – Believing that products will sell themselves.
Brenda Singh, former owner of GiftBasketVillas says:

For many new entrepreneurs like me, the process of launching a company begins with the lightbulb moment when we conceive a bright idea for a new product. Often, we are so passionate about the idea that we believe its virtues will be evident to our potential customers — that our products are so unique, beautiful and obviously superior that they will sell themselves.

Unfortunately, it’s not that simple. A common mistake I made is thinking that if my gift baskets were great therefore my company will succeed. It may be a lot easier for a brick and mortar company to succeed. The phrase, ‘build it and they will come’ does not work in the online and customized gift-basket industry.
So much goes into creating a successful business, especially in the new age of technology. I mistakenly thought having a website was easy; again a huge learning curve.. There is so much to do with a website that it is overwhelming – learning SEO, back-linking, learning about content being king, and not only content, but provocative, stimulating information. I’ve also learned that websites have only seconds to capture interest and needs to be worked on constantly.
My biggest issue however is making sales calls. I’ve never had sales training and I needed to recognize a simple fact: marketing, salesmanship is pivotal to the success of my new company. New business owners initially ignore this, to our own detriment.  With no sales experience and not having taken classes in how to sell.
If I had to do it over again, I would focus my energies on
  • Pre-planning,
  • Looking at successful techniques, models, and strategies.
  • Understanding what the pain point is in my marketplace, and how best to do use my product to help the customer.
  • Modifying  procedures, systems, or
  • Methods of developing external relationships.
  • Strategic networking
Making such modifications could set the course on a different direction and a bright new future. I foresee a long series of hurdles, but I understand it will take time to developing lists of prospects, identification of likely targets, obstacles in getting past gatekeepers, securing appointments, find acquaintances who could make referrals simply to secure an appointment and finally, what makes my product different from and stand above the alternatives.

I am destined to fail, unless I embrace other strategies. – hiring a salesperson, an internet expert and/or a mentor.

Mistake #10 Excess-Prepacking of Gift Boxes at Christmas

Diane Dick, from Apex Gift Boxes Ltd, Leeston, Christchurch, Canterbury, New Zealand  remembers:  Thank you for the opportunity to share with you my biggest blunder in our first year of Christmas gift packing.  I had heaps of staff that I had employed, thinking that I would need them all and in hindsight probably could have done the job with half the number. So to keep them all busy during packing, I had them pre-pack lots of the different size boxes that we had available for sale, in anticipation of lots of sales or big orders in these price brackets.You guessed it, the orders for those sizes just didn’t happen, everyone wanted bigger ones, or personalized ones!!!  Come the end of the Christmas pack, I had to painstakingly unpack all the products, remove the woodwool, and undo all the boxes to pack them away.  Lesson learnt, unless you already have an order for that product, then don’t merrily assume that it will come.  Now we pack to order. We remove stock from our shelves for each bulk order placing them into a box with the customer’s name on them. Then when we’re ready to pack we just pull up the box and get to work.

Mistake #11 – Starting a Business without Knowing What She was Doing

Lisa Chalker, owner of Family Affair Distributing Inc. located in Long Island, NY  shares:

My biggest mistake was NOT knowing what I was doing…literally.

My business “fell” into my lap and I had no idea how to make gift baskets, how to order, how to decide what to charge and how to get business!  Oh, and did I mention that I did not have money so ALL my purchases went onto my credit card building up a debt I have been dealing with for many, many years!

My first step to overcoming all of this was to educate myself…I found teaching tapes from Cherie Reagor, Mary Ann Jacobs and I got industry magazines.  I learned HOW to create great baskets, how to ship them, how to figure out what to charge and who I could target as clients.  I was constantly evolving and making changes once I found out what to do differently.  What a difference information can make…AND, I branched out to include imprinted promotional products and decorated apparel so that if a client didn’t need a basket, they could still use my services and I would still get the business  OR I could incorporate the premiums into my corporate baskets.

One more important thing I learned…I MUST always be networking!!!  That is sooo important and I would have to take another 4 paragraphs at least to tell you how crucial it is for building up your business and that if you don’t network, and network effectively, you will never see the growth you want to see!

Mistake #12 – Not Knowing Her Target Market and Marketing too Broadly

Deb Walton, owner of  Indy City Gift Baskets shares:

My biggest mistake in business took me much longer than the first year to learn. Maybe I’m just a slow learner. I thought making and marketing beautiful baskets would bring more business in my door. After all, I was receiving extraordinary compliments on our designs. My target market was corporate, I was marketing to banks, law firms, CPA’s, real estate, professional services, manufacturing. Anybody and everybody corporate. After all, my target market was anybody and everybody.

Then I learned a very valuable lesson, it was not about my design, the beautiful bow, the details I put into the gift. What does this gift do for the sender? What will it accomplish? The Corporate Anyone and Everyone clients were not purchasing from me every month or every week. They were buying a gift on an as need basis. They sure were not buying 20 gifts, all the same, every week.

I shifted my marketing, I finally figured out who was going to buy every month, or even better, every week. Here is my breakdown, you can see I’ve figured out my target market.

Corporate – Anybody and Everybody 42 gifts
Senior Communities 125 gifts
Residential Contractors 226 gifts

Know your target market and focus your valuable time marketing to them.


Mistake #13 – Selling without Listening

Cheryl Pliskin, former owner of  Jest Notes & Baskets  recalls:

I’d have to say that the biggest SELLING mistake was doing just that:  selling without listening. It takes time to learn how to network properly and without being in the prospect’s face BEFORE establishing a relationship.  Learning that giving first was significant, learning that there has to be a need before you can suggest a solution and learning patience were huge.

On the BUYING side, I bought too much of some items that I thought would be critical before knowing if there was a market.  Case in point:  all that dang cow ribbon!  I still, almost 25 years later, have some rolls left.  Avoiding impulse shopping, bringing in too much of a specialty item that isn’t universal enough for different types of gifts and just not getting spread too thin were key lessons.

And now, a note from me:

This was a fun article to write — because my readers and fellow gift basket company owners wrote it.

It was interesting to see that most of us make many of the same mistakes and learn from them.  Cheryl’s response about her cow ribbon reminds me of that peacock print cello that every teacher at one of the conventions was pushing.  I still have a roll of that.

For those of us who started our business back in the 1990’s, Celeste is right when she said that there weren’t as many places to learn from.  I remember how excited I was when I first discovered Gift Basket Review magazine and the Jubilees.  And then the discovery of AOL and Prodigy groups finally gave us opportunities to network online with others all over the country.  Everyone was willing to share because we were all in this new industry together — learning as we went along.



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