Hi there, Solopreneur! 

Happy Wednesday, and welcome to issue #30 of Solopreneur Doorway, a weekly newsletter that helps you turn your skills into solutions people buy.

I’m glad you’re here. Was this email forwarded to you? Get yours here.

This week’s issue is a 4.0-minute read.

⏰ Patience is a Virtue Until it Pushes Your Business into this Fallacy Quicksand

One of the most dangerous traps to avoid in your solopreneur adventure is the sunken cost fallacy (the “SCF”).

⚡️ Consider this:

You invest 9 weeks and $3,455 dollars into your business idea only to realize that you built the wrong solution to solve the wrong problem.

Instead of abandoning your idea, searching for the right problem, and building a smart solution, you stay on course.

You convince yourself that since you’ve come this far, you’d be crazy to quit and start down a new road.

So, you hang in there. You can’t stand the idea of losing all that time and money, even though your new research, results, and gut instinct tell you it’s smarter to jump off the sinking ship and swim ashore.

That’s the Sunken Cost fallacy. It’s a deep, dark sinkhole that you have to identify and avoid.

Here are 3 proven remedies to avoid the awful SCF.

Set Realistic Timelines

When you start your solopreneur biz (or if you’re reviewing your current model), it’s essential that you develop the right timelines for the product or service you’re testing. Building these timelines gives you fair warning that the SCF is knocking at your door.

Answer these questions to build your timeline.

• How much time do you need to make sure you’re solving a BIG problem for your clients and customers?
  

• How much time do you need to make sure you have created the right solution to fix the BIG problem?
  

I understand your timelines may differ from those of your competitors or solopreneurs across various industries.

📘 If you’re building and selling a digital e-book, you can likely get enough data in a couple of months to answer the above two questions. If you’re creating a new SaaS, it may take several months or a year. 💻

The key is to collect the right data about your client's problem in the right amount of time so you can make a smart ‘STAY’ or ‘GO AWAY’ decision.

If you’ve spent 6 months on LinkedIn and have only two average clients, you may want to change direction.

If you’ve given 4 to 6 months to your YouTube channel and you’ve noticed a consistent increase in views, visits to your website, and customer conversions, you may be on the right path.

Stay long enough to give your ideas a chance without wasting more time hoping the wrong solution will turn into the right one overnight.

Build a Sensible Financial Model

I know modern-day solopreneur coaches tell you it’s a huge waste of time to build a financial model. They say, “Everything will change in a few months, so what’s the point?”

Here’s the point.

It’s your money, not theirs! Investing your precious capital in your solo biz means you ought to know what type of pricing and sales volume you need to sleep at night while making your business profitable.

When you start a new venture (or if you’re taking the pulse of your current business), it’s imperative that you create a simple financial model to understand your investment, timeline, and the potential profit your business can generate.

Do this the right way and develop realistic expectations. The earlier you understand the various financial implications of your timing and choices, the more often you’ll avoid huge financial headaches.

You won’t sink your money month after month into a floundering business that is not building the right solutions.

Start with 3 key components for your financial model.

1. Identify the TAM (total addressable market) for your offer.
   

2. Experiment with different prices for your offer.
   

3. Calculate the profit you’ll realize at different prices and various sales volume levels (18 digital courses per month, 11 new clients per quarter, etc.)

Manage your expectations on the down side rather than the blue sky. It’s more fun to exceed your expectations than to overpromise and underdeliver.

Once you have your model, be honest about how much you can invest and for how long. If you exceed your timetable without seeing the necessary profit, then it’s likely you’re at the edge of the SCF sinkhole. Tread lightly.

Stick Close to Your Competition and Monitor Industry Trends

Realistic timelines and a prudent financial model give you an enormous advantage in stepping around the SCF trap. Yet, without paying close attention to your competition and industry trends, you can stay in the slow lane for a long, long time.

Every month, carve out some time to review these items and stay on the inside track.

1. Review the websites of your competition to monitor any new products or services they provide.

Is your offer still valuable, and does it still cater to the right audience?

Is your unique selling proposition capturing a share of the market that your competition overlooks?

2. Read through Reddit and LinkedIn conversations to gather insight on the problems your customers are trying to solve. Is your offer still tackling the most challenging BIG problems of your customer base?

The SCF is real, and it’s always dangerous. I have every confidence that if you keep these 3 escape routes top of mind, you’ll stay out of the quicksand and on dry, prosperous footing.

• Set Realistic Timelines
  

• Build a Sensible Financial Model
  

• Stick Close to Your Competition and Monitor Industry Trends

Stay curious and keep opening doors.

-Erik

Time to Jumpstart Your Solo Business!

🙄 Do you feel like you’re taking all the right steps to expand your solo biz and you know there’s a missing piece?

When you’re ready, reward yourself with a dedicated strategy session.

Together, we’ll walk through your business, offers and find out what’s missing.

I’ll deliver to you a strategy solution that can simplify your approach, reduce your frustration, and streamline your revenue.